Liquidators seek expanded probe of alleged South African Bitcoin scheme

Published at: Jan. 15, 2021

Less than a month after a Cape Town High Court granted a provisional order of liquidation against Mirror Trading International, the liquidators are seeking expanded powers to investigate the company and recover investor funds.

According to Herman Bester, one of the four appointed liquidators, the team needs to operate across multiple jurisdictions to ascertain the full scope of MTI’s operation.

The liquidators are currently attempting to trace all the company’s assets. After this process, the team will submit a formal report to the court indicating the likelihood of successfully returning investor funds to the victims of the alleged scam.

According to Bloomberg, the courts may grant a final order for the liquidation process on March 1 if the proceedings remain unopposed. The first meeting of MTI’s creditors will take place two months after the court order to vote on a final liquidator. Judging from previous crypto scam-related liquidations, MTI’s creditors may have a long road ahead.

As previously reported by Cointelegraph, both the Texas States Securities Board and South Africa’s Financial Services Conduct Authority took action against the company in 2020.

MTI is accused of misleading its clients to invest in its scheme, promising a 10% return on investment per month. The alleged Bitcoin (BTC) MLM scheme also claimed to have more than 260,000 investors from over 170 countries.

However, the FSCA investigation into the firm’s operations did not find any evidence of successful trading by the company. In total, MTI is believed to be holding about 23,000 BTC worth over $880 million at the current Bitcoin price.

According to South African media outlet The Citizen, leaked internal communication reportedly indicates that senior executives at the company were unaware of the scam. According to details from the Zoom meeting in question, only the CEO Johann Steynberg was in complete control of the firm’s operations.

Steynberg is reportedly AWOL and is believed to be in Brazil. Also, nobody at the company has heard from him since December 2020. The Polokwane resident’s last official communication was a repudiation of the allegations against the company.

MTI is one of several alleged crypto-related scams in South Africa. These investment schemes take advantage of the Bitcoin popularity in the country to fleece unsuspecting victims.

Back in July, Willie Breedt, operator of the VaultAge crypto scam that reportedly stole over $16 million from 2,000 investors, was declared bankrupt. Breedt had earlier fled the country to neighboring Mozambique during the heat of the investigation.

Tags
Regulation
Crimes
Scams
Bitcoin Scams
South Africa
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