- MTI was an online bitcoin trading platform that promised lavish returns to investors looking for passive income.
- After accepting hundreds of millions in rands in investments, it was provisionally liquidated in December after it abruptly stopped paying out funds.
- Data firm Chainalysis, in its crypto crime report, has now ranked MTI as "by far the year’s biggest scam".
Mirror Trading International, a Stellenbosch-headquartered Bitcoin trading scheme, has been named 2020's biggest global cryptocurrency investment scam by data firm Chainalysis.
MTI imploded in late December, after its offices were raided by authorities and it stopped paying out funds to tens of thousands of members. The scheme promised lavish returns for investors looking for a passive income. But despite taking in hundreds of millions of rands in deposits it never had a license to operate as a financial services provider. The scheme also offered commissions for recruiting new members, one of the hallmarks of multi-level marketing*.
It was provisionally liquidated in late December, two weeks after the abrupt disappearance of its founder and CEO, Johann Steynberg. Steynberg has not replied to requests for comment from Fin24. Before being provisionally liquidated, the platform's leadership denied it was a operating illegally, accusing detractors of being jealous and resentful.
In its report on cryptocurrency crime for 2020, Chainalysis said that MTI was "by far the year’s biggest scam", taking in $589 million (worth 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".
The data analysis firm noted that a feature of MTI was its apparent usage of a cryptocurrency gambling service as a "money laundering and cash out mechanism".
"Cryptocurrency observer and venture capitalist Dovey Wan has remarked that this is becoming a common money laundering technique for many cybercriminals who use cryptocurrency, as gambling platforms can be used similarly to mixers to obscure the origins and flows of illicitly-obtained funds. Our data suggests that this is especially true for scammers," it said.
MTI did not reply to a request for comment.
Cheri Marks, the group's head of communications and marketing, previously told Fin24 that only Steynberg could give answers about what happened at MTI.
Hawks spokesperson Col Katlego Mogale, meanwhile, told Fin24 last week that the unit's probe of MTI was still ongoing.
"An investigation docket remains confidential and updates are constantly given to the complainants by the investigating officer."
*Multi-level marketing (MLM) is legal, and industry lobby group, the Direct Selling Association of SA, says that Ponzi and other pyramid schemes have been mimicking the style of legitimate MLM businesses