- The Financial Sector Conduct Authority served search and seizure warrants at Mirror Trading International offices and the homes of two executives earlier this week.
- MTI is a Stellenbosch-headquartered company that accepts client funds via cryptocurrency, Bitcoin.
- The FSCA said its investigation on MTI will continue without fear, favour or prejudice and the regulator and its investigators are not threatened or deterred by unfounded defamatory remarks.
The Financial Sector Conduct Authority says it searched the offices of Mirror Trading International and the homes of two of its executives earlier this week as part of their ongoing investigation into the company.
MTI is a Stellenbosch-headquartered company that accepts client funds via the cryptocurrency Bitcoin. The FSCA announced back in August that it was investigating the company for conducting business that, in the regulator's view, requires it to be in possession of a financial service provider license.
The market conduct regulator for financial services says it is also ready for whatever countersuit MTI may bring against it.
The FSCA said in a media statement that it arrived with search and seizure warrants at MTI's offices in Stellenbosch and Polokwane, as well as the homes of CEO Johan Steynberg and Marketing Director Cheri Marks. The warrants were issued in terms of the Financial Sector Regulations Act.
MTI is not only being probed in South Africa. Authorities in Texas in July ordered it to stop trading in the US State after the company was fingered as a “multilevel marketing get-rich quick scheme”.
According to Moneyweb, MTI said the company's lawyers are preparing to approach the courts to have the warrants set aside, and to claim damages from the FSCA. MTI did not respond to a Fin24 request for comment sent on Wednesday.
FSCA divisional executive for investigations and enforcement Brandon Topham told Fin24 on Thursday that "the FSCA takes note of their [MTI] intentions and is ready to engage in the legal processes. We are accustomed to being challenged and are confident in the work which we perform and we are very prepared to defend our actions."
In a statement, the FSCA said it does not conduct criminal investigations. "Our investigations are carried out in terms of the Financial Sector Regulations Act, 9 of 2017, which is aimed at protecting the South African investing public and to ensure a secure financial sector."
The next step for the FSCA is for investigators to examine the evidence. On conclusion of the investigation, the FSCA will make a decision which may include taking regulatory or administrative action, and or referring the evidence obtained to other bodies.
"The FSCA's investigation will continue without fear, favour or prejudice and the regulator and its investigators are not threatened or deterred by unfounded defamatory remarks," said Topham.
"Our earlier warning to the public to exercise extreme caution when 'investing' with any person or organisation not registered as a Financial Service Provider or in terms of a properly executed Prospectus registered with the CIPC or registered as a financial institution with the Prudential Authority, remains in place."
A month ago, MTI allegedly had the names of members, usernames, email addresses, Bitcoin balances and earnings exposed in a data dump on the dark web.
Topham said that, while the FSCA has taken note of the data dump, it is of "limited value and won't afftect our investigation in any way".