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MTI placed in final liquidation, 8 000 more bitcoin traced

Liquidators are encouraging MTI members to lodge claims, saying they will not be asked to pay contributions to the insolvent estate.
Some of MTI’s leaders are believed to have made hundreds of millions from the scheme. Image: Luke MacGregor/Bloomberg

Collapsed bitcoin scheme Mirror Trading International (MTI) was placed in final liquidation this week by the Cape High Court.

This comes as liquidators revealed that they had managed to track down roughly 8 000 additional bitcoin, on top of the 1 281 bitcoin recovered from Belize-based broker FX Choice and sold for about R1.1 billion.

An additional 8 000 bitcoin at current market prices is worth about R4 billion. Liquidators believe they will be able to track down more of the estimated 29 000 bitcoin that flowed into MTI.

The liquidators return to court on September 8 to argue that MTI should be declared a Ponzi scheme.

This would make it easier to chase down funds the liquidators believe rightfully belong to the insolvent estate. Anyone opposing this has until August 31 to file their replying affidavits.

Speaking to Moneyweb after the final liquidation was handed down, joint liquidator Riaan van Rooyen urged MTI members to lodge claims with the liquidators, saying they need not fear that they will be required to pay contributions to the insolvent estate.

Aiming to recover as much as possible

“We obviously want to recover as much money as possible for members, particularly the elderly and the vulnerable. It’s important for members to know that they will not be required to pay into the estate just because they benefitted from withdrawals. It merely means that their claims will be reduced by the amount that they have already received in terms of withdrawals. If they paid in for example, R30 000, and withdrew R10 000, this means their claim against MTI would be reduced from R30 000 to R20 000.”

Covid lockdowns permitting, the liquidators plan to launch a national roadshow to contact as many members of MTI as possible and to assist them in lodging their claims.

Undue enrichment

The chief beneficiaries of MTI’s multi-level marketing scheme were the founders and early adopters, including 50% shareholder Clynton Marks, who opposed the liquidation of the company and argued that there were good prospects of rescuing the company by other means.

Some of the MTI leaders earned more than R100 million from the scheme, according to a data dump by a group called Anonymous ZA, and liquidators will be hunting down what they believe is undue enrichment.

Read: Anonymous data dump ‘spills the beans’ on Mirror Trading International

Some of the leaders of MTI, including Marks, are believed to have made hundreds of millions of rands from the scheme.

MTI was declared by Chainalysis as the world’s biggest bitcoin scam in 2020.

MTI boasted on its website of a computerised algorithm that generated returns of 0.5% a day, equivalent to about 180% a year – though when the Financial Sector Conduct Authority (FSCA) investigated, it could find no evidence of an algorithm, or of any successful trading at all.

FX Choice froze MTI’s accounts due to extravagant and fraudulent claims about its trading success.

The broker told the FSCA that 1 846 bitcoin were deposited with it between January and June 2020 – but of this, 566 bitcoin (about 30%) were lost.

MTI was initially trading forex through FXChoice, but later purportedly switched to trading bitcoin through a new broker called Trade 300 – which the FSCA concluded was a fraudulent creation of CEO Johann Steynberg’s and did not exist as a bona fide brokerage.

The failed bitcoin scheme was placed in provisional liquidation in December 2020 after Steynberg went missing, just days after MTI stopped processing any requests for withdrawals. The FSCA started issuing warnings about MTI in August last year, and advised members of the public to ask for their money back.

Read: Joining MTI may end in tears

MTI is reckoned to have had 280 000 accounts by the time it was shut down in December. This was built up through a multi-level marketing system that rewarded members with commissions of 10% on money invested by new referrals.

Liquidators believe that number of accounts will reduce to between 150 000 and 180 000 once accounts opened in the name of family pets and other bogus accounts are stripped out.

Read: An inside look at how MTI managed to prolong an extraordinary losing streak

The multi-level marketing scheme was structured so that members could increase their earnings by extending their ‘down lines’, even to the point of naming their dogs as investors.

Members can lodge their claims here.

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Hope SARS is all over this . There must be millions due in CGT alone . PAYE also due on the outrageous income paid …..for a while anyway !

I suspect some huge losses as well. Can they be deducted from other Capital gains???

You have to be desperate to trust what a liquidator says. Or is gullible the right word?? Suppose enough of those between the MTI “investors” Not paying back almost sounds too good to be true!! Ever heard that before????

Hahhaaa.

You can deduct losses of capital from other capital gains…
But in this case I think many people just want their capital back at all.

So it’s not rly a tax issue for most.

SARS is probably waiting for the small fish to be paid out and then its going to nail them. The sharks have swum away and their money is probably sittng pretty in Panama somewhere.

Why the eagerness to liquidate, could it perhaps be fee related. You dont need to be a rocket scientist to see that many of these coins could of been purchased way below the current value of BTC the rand loss value however is a constant. One would assume that if the coin price doubles they only have to find half the coins to return the rands. If they liquidate it now before they find all the coins it would be financially beneficial for the liquidators to have access to either the coins or cash equivalents while they are tracking and tracing the clients to give additional money to.

Ryk you need to look closely at this one, it might go somewhere.

So what are you suggesting? They don’t liquidate and rather continue to run the Ponzi scheme as a going concern?

May I ask a question that stems from my ignorance of BTC, how will these 8000 “coins” be liquidated/ converted to FIAT now that they have been found, but if the scamsters have the pin/ code to the coins/ wallet, and the scamsters are nowhere to be found??

Oh, another question, if BTC is not an entity, has no identity or corporate structures, who pays the miners, and how is that amount determined please?

Indeed a mystery …. just as mysterious as to how the cryptocurrency system exists and why “investors” read “speculators” buy into it.

“particularly the elderly and the vulnerable”

I wonder how many 80 year old grannies are holding a crypto stash.

“Liquidators believe that number of accounts will reduce to between 150 000 and 180 000 once accounts opened in the name of family pets and other bogus accounts are stripped out” – LOL, I’ve never heard of real investors doing this.

Most family pets prefer Dogecoin.

I have a dog in Azerbaijan that has a bitcoin “investment account”.

A man’s best friend!! Even sends me “Family support funds” from time to time. Guess he thinks I’m a dog!!

Don’t see any court doc.proof of Final Liquidation here? Also some contractually binding evidence of the extent of liquidators costs?
How can one contract with liquidators when neither are available?

Would like court proof of FINAL liquidation,,, some proof and info. re new found MTI BTC,and a contractual doc re liquidators costs and fee sand payouts based on when BTC were sold and coverted back to Rand.
After all, is this legal process not in place to try and ‘make right/ good some of the funds people have placed with MTI??

End of comments.

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