White Crooks: Mega Pyramid/Ponzi scheme: MTI: Provisional liquidators appointed

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The Master of the Cape High Court has appointed four provisional liquidators to track down whatever assets they can from Mirror Trading International (MTI), the bitcoin investment scheme that stopped paying out members’ requests for withdrawals in December after its CEO, Johann Steynberg, went Awol.

The four provisional liquidators appointed are AW van Rooyen, H Bester, Jacolien Frieda Barnard, and Deidre Basson.

MTI hoovered up an estimated 23 000 bitcoin, currently valued at about R12.5 billion, by the time it shut down in December.

It promised investors up to 10% return a month using a computerised trading system, first trading forex, then bitcoin, although the Financial Sector Conduct Authority (FSCA) could not find any evidence of trading success by the company.

The FSCA alerted the public to the dangers of investing with MTI last year and advised members to ask for their money back.

Despite this, the volume of bitcoin flowing to MTI appeared to grow as the company put out messages claiming the FSCA had overreached its powers and had no jurisdiction over it.

A leaked Zoom meeting between senior MTI executives and leaders seems to suggest no-one had any idea it was all a scam, and pinned the blame on the now missing CEO Steynberg, who is reckoned to control about 7 000 bitcoin worth about R3.8 billion. He is believed to be in Brazil. Angry MTI members posting on social media are not buying the claim that Steynberg acted alone.

The provisional liquidators will now commence the task of tracking down and taking control of the assets and liabilities of MTI.

Inquiry

There will also likely be a Section 417/418 inquiry in terms of the Companies Act to interrogate executives of the company to find out what happened in the company and, more particularly, what happened to the assets.

MTI members hoping for a quick recovery of assets may be disappointed, as the scale and complexity of the investigation will likely take several years before there is any finality. The provisional liquidators have until March 1 to submit a report detailing the assets and liabilities of MTI, at which point a final liquidation order will likely be granted.

Anyuschka Nett, senior attorney with Luitingh Attorneys, says creditors can now start to submit claims in anticipation of the final liquidation order being granted.

“There is a risk, however, depending on the scale of any shortfall in assets, that some members may have to contribute to the costs of the liquidation. We will only know this once we have the report from the provisional liquidators.”

Nett says the first meeting of creditors will take place six to eight weeks after the final liquidation order is granted. At the first meeting of creditors, claims will have to be lodged and creditors will be allowed to vote on the appointment of a final liquidator.

The provisional liquidators appointed were recommended by Recovery Action Group (RAG), a group of MTI members hoping to recover some of their investments.

Trackers

There are various international law enforcement teams looking at the MTI scam, with trackers being placed on bitcoin wallets linked to MTI and its leaders to make sure bitcoin are not transferred to third parties.

Bitcoin.com reports blockchain intelligence firm Whitestream as saying some MTI bitcoin were sent to crypto “mixers” which is a way of attempting to hide the source of the bitcoin.

Whitestream says this is a common tactic used by “other popular Ponzi schemes we already saw this year”.

Cyber security and crypto expert Vaughn Victor says “mixers” such as the Wasabi wallet are often used to hide bitcoin movements, but are only partially effective.

“It’s a more complicated process to track bitcoin going into and out of a Wasabi and other mixer wallets, but it can be done. Most people using wallets like this are doing it for criminal purposes.”

Due to the volume of claims involved, creditors are being encouraged to lodge claims even before the final liquidation order is granted, and can do so here.

RAG is posting regular news updates on MTI, Finalmente Global and other suspected bitcoin scams here.

The provisional liquidators will also communicate separately with creditors in the coming weeks.

Source: https://www.moneyweb.co.za/in-depth/investigations/mti-provisional-liquidators-appointed/

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