MTI placed in final liquidation, 8 000 more bitcoin traced

The Cape High Court placed the final liquidation of the collapsed bitcoin scheme Mirror Trading International, (MTI), in effect this week.

The liquidators announced that they had been able to locate approximately 8 000 bitcoin in addition to the 1 281 bitcoin found from FX Choice, a Belize-based broker. This was sold for R1.1 billion.

At current market prices, an additional 8 000 bitcoin is worth approximately R4 billion. Liquidators expect to be able track down more bitcoin than the 29 000 that have escaped MTI.

On September 8, the liquidators will return to court to argue that MTI should not be considered a Ponzi scheme.

This would make it easier for liquidators to recover funds that they believe belong to the insolvent estate. Anybody opposing this can file their reply affidavits by August 31.

Moneyweb spoke to Riaan van Rooyen, joint liquidator, after the final liquidation had been handed down. He encouraged MTI members to file claims with the liquidators and said that they should not be afraid of being required to contribute to the insolvent estate.

To recover as much as possible

“We want to make sure that members get as much money as we can, especially for the elderly and vulnerable. Members should know that they won’t be required to contribute to the estate simply because they received withdrawals. This simply means that any withdrawals they have received will reduce their claims. Their claim against MTI would be reduced if they pay in R30 000 and withdraw R10 000.

The liquidators are planning to organize a nationwide roadshow to reach as many MTI members as possible to help them file their claims.

Unnecessary enrichment

MTI’s multilevel marketing strategy was primarily a success for the founders and early adopters. Clynton Marks, a 50% shareholder, opposed liquidation and claimed that there were good chances of saving the company using other means.

According to an data dump done by Anonymous ZA, some MTI leaders made more than R100million from the scheme. Liquidators will be looking for undue enrichment.

Marks is one of several leaders of MTI who are believed to have earned hundreds of millions of rands through the scheme.

Chainalysis declared MTI the biggest bitcoin scam in 2020.

MTI claimed on its website that it had a computerized algorithm that could generate returns of 0.5% per day, which is equivalent to approximately 180% per year. However, the Financial Sector Conduct Authority investigated and found no evidence of such an algorithm or any trading success.

FX Choice frozen MTI’s accounts because of extravagant and fraudulent claims regarding its trading success.

According to the broker, 1 846 bitcoin had been deposited with it between January 2020 and June 2020. However, 566 bitcoin (or about 30%) were lost.

MTI initially traded forex through FXChoice. However, MTI later switched to bitcoin trading through Trade 300, a broker created by CEO Johann Steynberg and not a legitimate brokerage.

After Steynberg disappeared, the failed bitcoin scheme was placed into provisional liquidation in December 2020. This happened just days after MTI stopped processing withdrawal requests. In August 2018, the FSCA began warning people about MTI and advised them to get their money back.

MTI was estimated to have had 280 000 accounts at the time of its December shutdown. This was achieved through multi-level marketing systems that paid 10% commissions to members for money they referred.

After accounts that were opened under the names of family pets or other bogus accounts are closed, liquidators expect that there will be a reduction in accounts to 150 000 to 180 000.

Multi-level marketing was designed so members could increase their earnings through extending their “downlines”, even to the point where they named their dogs investors.

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