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MTI placed in provisional liquidation and damage could be huge

Provisional liquidator to be appointed in the next few days to establish what happened to the estimated 23 000 bitcoin – worth R9.45bn.
Recovery Action Group hastily convened to represent as many of the 280 000 members as possible. Image: Shutterstock

The Cape High Court placed bitcoin investment scheme Mirror Trading International (MTI) in provisional liquidation on Tuesday (December 29).

The court order instructs the sheriff to attach all property that appears to belong to MTI in all provinces and submit an inventory to the Master of the Cape High Court.

No one from MTI turned up in court to defend the action. 

A group called Recovery Action Group (RAG) was hastily convened over the last few days to represent as many of the estimated 280 000 members as possible to speak with one voice before the court and the regulators.

There was a fear that multiple liquidators were circling MTI with a view to feasting on its carcass, but in the end, the court granted the provisional liquidation order to MTI member Anton Lee, who had been trying unsuccessfully to withdraw funds from the company since December 21.

Tracking down the trades

A provisional liquidator will be appointed within the next few days to commence the mammoth task of tracking down the assets of senior MTI management and leaders.

Moneyweb has been inundated with emails from members as far afield as the US, Canada and Mexico asking for news about the fate of their investments.

Advocate Vaughn Victor, a cybersecurity and crypto expert who is part of the team representing Lee, says it now appears that investors shipped roughly 23 000 bitcoin (worth R9.45 billion at current prices) to MTI.

Most of this was done within the last seven months – well after the Financial Sector Conduct Authority (FSCA) issued warnings to the public to steer clear of the company which lured investors from all over the world with promises of returns of up to 10% per month.

Read:

At this stage, it is not known how much of this bitcoin remains within the control of senior MTI managers, though Victor says his team has been able to track about 7 000 bitcoin in wallets under the direct control of MTI founder and CEO Johann Steynberg (worth about R2.9 billion at current prices).

It is unlikely anything like 23 000 bitcoin remains to be recovered by liquidators, as many believe the profits and bonuses paid out to members came from incoming bitcoin from new members.

Where is Steynberg?

As Moneyweb previously reported, Steynberg went missing in early December and is believed to be hiding out in Brazil. It was around this time that members started noticing that their requests for withdrawals went unanswered.

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“We have placed wallet watchers on all the bitcoin under the control of Steynberg and other senior MTI managers and we will now start the process of reaching out to international authorities, including Interpol, to place a freeze on the movement of these assets,” says Victor.

Victor is also involved in the forensic investigation into BTC Global, another bitcoin investment scheme promising returns of around 14% a week, which went down in flames two years ago.

“Many of the same people involved in MTI were also involved in BTC Global,” says Victor.

FSCA raid

MTI started running into trouble in October following a search and seizure raid by the FSCA, which retrieved phones and electronic devices from MTI’s head office in Stellenbosch and the homes of some of its executives.

Read: MTI plans countersuit after FSCA raid on offices and homes of execs (Oct 28)

The FSCA warned the public that MTI was trading without a financial services provider licence and was making extravagant claims to attract new members.

MTI maintained that it did not fall under the jurisdiction of the FSCA and was being victimised by the authority.

MTI told its members that it was able to generate returns of up to 10% a month using a computerised algorithm, but when the FSCA investigated it found no evidence of any trading success.

Until a few months ago, MTI was trading forex through a Belize-based broker called FXChoice, and lost roughly 30% of 1 846 bitcoin on deposit with the broker over a period of four months. Members were shown demo rather than actual trading accounts, issued by MTI, prompting FXChoice to freeze the remainder of the bitcoin linked to MTI.

Regulators become concerned 

MTI then started to come to the attention of financial authorities in the US, Canada and SA, and purportedly switched to trading bitcoin rather than forex on the basis that this would prevent regulators interfering in its business. It claimed to be doing this through a new broker called Trade300, but the FSCA found no evidence that this broker existed. All it found was a website “under maintenance”, registered to Joe Steyn, a known alias of Johan Steynberg.

Speaking at an RAG online meeting over the weekend, Advocate Hendrik van Staden said four steps must now be taken to secure the remaining assets of members:

  1. Obtain a provisional liquidation of MTI to secure the assets that were entrusted to the company and prevent them from being shipped to third parties.
  2. Once the quantum of assets is established, it will be determined whether MTI can meet the claims against it before the “return date” (March 1, 2021, according to the Cape High Court order) and whether there is any reason not to grant final liquidation.
  3. The liquidators will seek extended powers from the court to take full control of the assets and ascertain where other bitcoin may have been hidden.
  4. If MTI is unable to pay back the claims against it, liquidators will ask the court for a final liquidation order, at which point the proceeds of any assets will be sold and returned to members, after the costs of liquidation have been satisfied.

Van Staden also pointed out that those who received more than they paid into MTI can be asked to return or contribute to the liquidated estate.

This will come as a blow to the many thousands of people who made vast commissions from introducing new members to scheme.

The South African Revenue Service (Sars) has also been issued a copy of the Cape High Court order, and will no doubt be on standby to collect its share of undeclared profits generated through the MTI scheme.

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”Alimony is the screwing you get for the screwing you got”

Anonymous

Haha – all the ”smart-asses” that got paid the illegal millions will have to start ”ducking and diving” now!

Van Staden also pointed out that those who received more than they paid into MTI can be asked to return or contribute to the liquidated estate.

”This will come as a blow to the many thousands of people who made vast commissions from introducing new members to the scheme. SA Revenue Services (Sars) has also been issued a copy of the Cape High Court order, and will no doubt be on standby to collect its share of undeclared profits generated through the MTI scheme”

Stealing from Peter to pay Paul, until the proverbial hits the fan, this only after an investigation starts, giving the thieves enough time to rake in the millions

My guess is there are no bitcoins. This was a classic Ponzi scheme and the thief made off with a few billion of other peoples money

“A fool and his money are soon parted”

Last night, after the depressing news about the new lock-down, my day was made a whole lot better by a Facebook chat with somebody I suspect is an ‘investor’, who, in all seriousness, asked whether I’d studied MTI’s business model. That’s a new one. Fraud and theft now apparently have business models too, ha-ha!

People can be morons. It could be expected that MTI would carry on receiving deposits after the FSCA warning. But deposits INCREASED?! What is wrong with the world?

They are NOT morons. Many of the “investors” are criminals themselves. What you people dont understand is how come they continued to invest even after all the news broke that it was a ponzi. The reason is they KNEW its a scam but they wanted thier profit out before it collapses. It is important not to believe the amount of money lost, its part of the lie, its very clever actually, the “investors” claim they lost more than they did so they dont have to pay back anything when things fall apart. The FSCA and police should do some digging into who all these large investors are, many have dealings with past ponzis. Why were no charges brought by past investors in the ponzis the operators were also involved in? What is the origin of all this supposed money lost?
Im so glad Texas regulators sorted the scum saffers who thought they were gonna pull the stunt here.

Looks like the typical signs of a Ponzi scheme.

The Ponzi Game is about ‘Time’, the longer the Liquidators, SIU, Hawks and the Police take to contact Interpol and arrest the culprits the more likely it is that the $Bitcoins$ will be gone forever.

Has anyone been arrested???

Damnit
Still waiting for EricVenter to pop in and say we’re undeducated children not understanding how crypto and trading works

Where for art thou EricVenterrrrrrrrrrrr

…EricVenter is too busy repeatedly pressing the “withdraw” button on his MTI demo account.

Wow…clearly you understand nothing about MTI’s world first best-in-business fully AI-integrated supercomputerized business to claim it’s a demo account

Rude

/sarcasm

😉 I agree, The Original. Good one! *lol*

I may understand nothing about MTI’s “inner workings”, but it’s easy to I recognize the typical ‘smoke & mirrors’.

There is NO ‘business model’ to MTI, and their (mythical?) trading bot.

Well, if Cash-in-Transit robbers state their ‘business model’ consists of blowing up cash-trucks, then I suppose MTI also has a business model: Peter pays Paul.

Top tip – there is no 23000 Bitcoin/R9.45 billion.

1) There was no bot making trading gains – so Peter was paying Paul all along.

2) The MTI Management made sure that the piggy bank is empty by making regular large withdrawals.

So I will be surprised if there is anything left to liquidate

Yep, this will be a case of from riches to RAGs

Stellenbosch giving ANC a run for their money

@Ballin

The big difference is:
People can choose to join a ponzi, MLM, or whatever scheme….it’s a CHOICE.
The ANC govt….you & I have little choice how the ANC spend (i.e. wastes) their collected income tax. It’s compulsory.

Brilliant comment and very true!

State Owned Enterprises and Municipalities spend our taxes on inefficiently and effectively whilst the central banks collude and dilute the value of our money by printing about 6% additional value notes every year.

This year was a record in the US, they have managed to print 20% additional value notes just in 2020. 2021 will be the 50th anniversary of the abolishment of the Gold Standard.

We are at Point Nemo, The Goverment officials are considering Negative Interests Rates which is balance Expropriation Without Compensation whilst Expropriation Through Inflation continues.

If I were one of the 280.000 ‘investors’ I would not dare to complain and so advertising my stupidity.

And thats part of why enforcement has trouble pinning these bastards down and they just go ahead and do it again. Ponzi shame

Fear and Greed.

Maybe the other way around. Greed first and now fear.

And nobody from the MTI crew was arrested yet ?

…they will be arrested “virtually” & will do “virtual” jail time.

“We have placed wallet watchers on all the bitcoin under the control of Steynberg and other senior MTI managers and we will now start the process of reaching out to international authorities, including Interpol, to place a freeze on the movement of these assets,” says Victor.”

I had a damn good laugh at this… let me be upfront, I’m bullish on Bitcoin (and I don’t expect many other users on here feel that way) but this advocate seems to be missing a fundamental aspect of Bitcoin…. there is no Interpol you can phone and ask them to “block the Bitcoin transfer” or freeze those “assets”. Your wallet watcher means nothing. Anybody can go to blockchain.com and look at wallet IDs.

If this crook has his private keys, those coins are not going anywhere unless he says so. It seems the Advocate may want to brush up about Bitcoin 101 before identifying oneself as a crypto expert in the public space.

100% but i dont think there are there many left – i reckon they kept paying out out old coins to new investors, he prob skimmed a couple off the top, well more than a couple but the majority of people who put cash in wont see anything in the fall out. Its all been paid out as “profits”. Interpol will catch up with Steyberg, thats pretty easy, surveillance and some gov pressure (which there will be since USA citizens are affected) and some top tier hacker and they will find him – just a matter of time – he’s prob not in Brazil cant wait to see how this pans out…

I also shook my head when I read that! Giving your BTC keys away is like giving away your ATM card and PIN but without their being a bank (or anyone) you can ever complain to. BTC 101

‘When it sounds too good to be true’ – we’ve all heard that one before,right?

…tears will soon follow

If it sounds like a duck and walks like a duck then it is a ???

…opportunity of a lifetime?

Another blow for corruption in the little town of Stellenbosch. Make sure you do a very thorough due diligence on management of companies which have their roots in Stellenbosch. There seems to be cancerous culture of corruption emanating from this little dorp.

The story proofs that low or high IQ possession plays no role in foreseeing the obvious when blinded with greed.

I am sorry to have to repeat this again in this forum, but a fool and his money are soon parted. Those that lost money had it coming. A simple due diligence, listening to interviews with Johan should have raised red flags and alarm bells. Unlucky you say; actually it’s just plain stupidity.

Just the tip of the pyramid to rival the great pyramid of Giza and Pharaoh Khufu’s efforts!

Deserved – these around the braai place “investors” deserve this sh&^T. Salaried morons (some that are actual degreed professionals) that have never taken real financial risks and expect to make almost impossible return in such a short space of time?

It makes me grin……

End of comments.

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