S.Africa’s BIGGEST SCAM of 2020: MTI liquidators recover R1.1bn in bitcoin
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Mirror Trading International (MTI) provisional liquidators have recovered 1 281 bitcoin, worth more than R1.1 billion at current prices, from the collapsed scheme.
Riaan van Rooyen, one of the joint provisional liquidators, told Moneyweb there’s a “high likelihood” of recovering more assets, following a Section 417/418 enquiry. The enquiry was held in terms of the Companies Act, which empowers liquidators to interrogate directors and officials in a quest to determine the reasons behind a company’s collapse, and to track down missing assets.
Van Rooyen could not reveal which MTI officials were questioned at the inquiry, as it is confidential in terms of the Companies Act. “What I can say is that we now have a better idea of what happened at MTI and where we might be able to look to potentially recover more assets. We are looking at every angle to recover assets, and we have had good cooperation from other crypto platforms in our investigations.”
Crypto exchanges started noticing unusual buying patterns late last year from people who had never owned bitcoin before, but were insistent on using these exchanges to purchase bitcoin and then ship them to addresses controlled by MTI.
MTI was placed in provisional liquidation in December last year after failing to pay out members’ requests for withdrawals. This was after CEO Johann Steynberg reportedly fled the country to Brazil, though the Financial Sector Conduct Authority (FSCA) believes he may be in Panama, which has no extradition treaty with SA. Others believe he is still in SA.
Read:
FBI jumps onto MTI investigation (Jan 4, 2021)
Liquidators swarm MTI (Dec 23, 2020)
MTI CEO goes AWOL, lawyers pull out (Dec 22, 2020)
Senior executives at MTI have maintained they were unaware that they were involved in a bitcoin scam that was offering up to 10% returns per month, though a dump of the MTI database by Anonymous ZA suggests some of the MTI “leaders” become multi-millionaires within a couple of years of joining the scheme.
It is reckoned that more than 23 000 bitcoin (worth more than R20 billion at current prices) were shipped to MTI by tens of thousands of members around the world.
Background
MTI claimed to be using a computer algorithm to generate these returns, but no evidence of the algorithm, or any successful trading, was found by the FSCA.
Van Rooyen says it will take more time to track down all the bitcoin shipped to MTI, given the difficulty of locating cryptocurrencies stored or hidden in different wallets.
In August last year the FSCA issued a warning on MTI and its exaggerated promises of 10% returns a month, and advised investors to request their money back.
Read: MTI was by far 2020’s biggest investment scam – Chainalysis
It seems thousands of people did not heed these warnings. MTI relied on a multi-level marketing system where members were paid commissions on new people introduced to the scheme. All seemed to be going well until late last year when the requests for withdrawals hit a slow, and members were asked to supply Know Your Customer (KYC) documents in order to access funds. Withdrawals came to a halt in December when Steynberg reportedly fled the country.
The 1 281 bitcoin recovered by liquidators came from a Belize-based broker called FXChoice that MTI had used for trading forex. A review of its trading performance found that it was losing money at a rapid rate, contrary to MTI’s claims of trading success. The FSCA likewise found no evidence of any successful trading by MTI.
Moneyweb previously reported that the application for the final liquidation of Mirror Trading International (MTI) has been postponed until May 31, apparently by groups that believe the company can still be saved and its debts restructured.
Neither Van Rooyen nor the FSCA believe there is much hope of that.
Other exchanges noticed unusually heavy bitcoin trading activity on the Luno crypto exchange this week, eliminating the usual arbitrage 2% to 4% gap that exists between local and overseas exchanges (South Africans generally pay 2% to 4% more for bitcoin on local versus overseas exchanges). It is believed these were the MTI bitcoin recovered from FXChoice being placed on the market for sale.
Marius Reitz, Africa general manager for Luno, says as much of the bitcoin shipped to MTI was purchased on Luno, it would make sense for it to be sold (on behalf of the liquidators) via the same exchange. He adds that the exchange became aware of clients shipping bitcoin to MTI, particularly after the FSCA warning, it started to block these transactions.
Van Rooyen has urged MTI members to lodge their claims at www.investrust.co.za and www.tygerbergtrustees.co.za. Should MTI members have any queries regarding the lodging of claims, these queries may be directed at [email protected].
“We need everyone who was involved with MTI to lodge their claims” says van Rooyen.
Source: https://www.moneyweb.co.za/moneyweb-crypto/bitcoin/mti-liquidators-recover-r1-1-billion-in-bitcoin/
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