- The Cape High Court is expected to rule on Monday whether Stellenbosch-headquartered Bitcoin trading scheme Mirror Trading International (MTI) should be permanently liquidated.
- MTI was provisionally liquidated in December after it abruptly stopped paying out funds to tens of thousands of members.
- Data firm Chainalysis has named MTI as the largest global cryptocurrency scam of 2020.
Update: The final liquidation hearing has been postponed to May 31.
Creditors of disgraced South African Bitcoin trading scheme Mirror Trading International (MTI) will convene in court on Monday to hear whether the investment platform – which promised lavish returns to investors before abruptly collapsing late last year – will be permanently liquidated.
MTI was placed into provisional liquidation in late December, after a client approached the court to say he had been blocked from accessing funds. Shortly thereafter, the Hawks started an investigation. Provisional liquidators were then appointed in early January to take control of the assets and liabilities of the Stellenbosch-headquartered company and establish what transpired.
MTI was started in April of 2019 by Johann Steynberg from Polokwane. Steynberg was the group's founder, CEO and, according to company records, sole director. It grew in popularity during the lockdown by actively promoting itself on social media as a safe bet to grow passive income. At one stage at claimed to have amassed 260 000 members worldwide who invested a total of R9 billion.
But from the outset, critics accused it of being little more than a get-rich-quick scheme, bamboozling vulnerable members with fantastical claims that it would grow their Bitcoin by using a super-intelligent trading bot.
In August last year, financial services regulator the FSCA advised clients to "request refunds into their own accounts as soon as possible". Two months later, the regular raided the group's offices.
MTI eventually imploded in December after the regulator lodged a criminal complaint against it with the Hawks, saying it had been operating without a licence and misleading clients.
Around the same time, MTI stopped paying out funds to members, and Steynberg disappeared.
MTI's leadership had, until that time, shrugged off all criticism as being motivated by jealousy of the platform's success and failure to understand its cutting-edge business model.
In late December, meanwhile, the group's remaining leadership shared a message on a Telegram channel to say while they did not know where Steynberg was. There were indications he may have fled to Brazil.
Cheri Marks, the group's marketing, previously told Fin24 that only Steynberg – listed on CIPC documents as the sole director – could answer questions about what transpired.
Steynberg has not replied to numerous messages sent to a number he had once used.
'Good case for final liquidation'
In response to a request for comment, the FSCA said that while it is not directly involved in Monday's case, it is "pretty confident" that the facts make for a good case for final liquidation.
The FSCA added it would hear what new information may come to the fore from the liquidation before making a decision about what administrative actions, if any, it would take against the individuals and entities involved in the matter.
MTI's provisional liquidators, meanwhile, did not respond to requests for comment.
Earlier this month, data firm Chainalysis ranked MTI as "by far the year's biggest scam", taking in $589 million (around R8.5 billion at current exchange rates) of cryptocurrency across more than 471 000 deposits, suggesting "a number of victims in the hundreds of thousands".