Wednesday, January 26

MTI liquidators pursue additional R2bn in ‘potential debtors’


A clearer picture is emerging of the Mirror Trading International (MTI) scam that freed tens of thousands of people around the world from their bitcoin (BTC) nearly a year ago.

MTI was placed in provisional liquidation in December 2020 and in final liquidation in July of this year, when it was revealed that the liquidators had recovered 1,281 BTC from the Belize-based broker FXChoice. A total of R1.05 billion was recovered from the sale of this BTC.

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The latest liquidators report released last week shows ‘possible debtors’ of R2.07 billion.

The final liquidators, appointed by the Superior Court magistrate on November 5, are Riaan van Rooyen (Investrust Insolvency Practitioners), Herman Bester (Tygerberg Trustees), Jacolien Barnard (Barn Trust), Deidre Basson (Tshwane Trust) , Christopher Roos (Sebenza Trust) and Chavonnes Coopers (CK Trust).

Read: MTI: Appointment of provisional liquidators

Preliminary research shows total assets of around R3.1 billion, although more research is required to confirm the figures.

JNX online

In their search for assets belonging to MTI’s estate, the liquidators successfully filed an application for the liquidation of JNX Online, a company controlled by former MTI CEO Johann Steynberg and his wife Nerina.

The report says that the liquidators are investigating the assets and affairs of JNX Online and will inform the creditors in due course.

It appears that Steynberg used JNX Online to buy and sell BTC and pay MTI creditors and employees.

JNX Online bank statements reflect monthly payments totaling R933,000 made to Steynberg’s wife.

She testified in the Section 417 investigation that JNX Online did not owe her this money and considered this to be her husband’s contribution to household expenses.

Read:

Steynberg was kidnapped and a company called Dulospan, which he used to acquire three real estate properties worth R6.5 million, collapsed on its insolvent assets.

Nerina Steynberg and a friend agreed to transfer cryptocurrencies worth R2.1 million to a wallet opened by the trustees of the insolvent estate. The liquidators say legal action is required to question claims potentially fabricated by MTI employees and vendors.

Most of MTI’s managers and department heads received excessive pay packages and, approximately as of October 2020, an additional BTC per person per month.

Crypto specialists have been appointed to help quantify and identify the claims from information obtained from MTI’s administrative platform known as Maxtra Technologies that was run from India.

Investor numbers

The report says there were a total of 23,691 investors in North America, 10,028 in Canada, and 10,563 in Namibia. A total of 181 claims were received from Thailand, out of a total of 6,000 claims received so far from creditors.

This is well below the hundreds of thousands of investors claimed by MTI before its collapse.

There are a number of possible explanations for this, including:

  • Members who earned more than they invested were informed that they may have to pay the liquidated estate of the MTI and therefore can avoid making claims; and
  • Many MTI accounts were opened in the names of family members, including pets, in order to earn commissions for the introduction of new members, thus exaggerating the true number of investors.

MTI was the world’s largest crypto scam in 2020, according to Chainalysis.

Read: MTI Was By Far The Biggest Investment Scam Of 2020 – Chainalysis

It is estimated that more than 29,000 BTC were channeled through MTI, worth more than R23 billion at current prices.

The scheme offered growth of 10% per month using a proprietary algorithm, of which the liquidators and the Financial Sector Conduct Authority (FSCA) say they found no evidence.

MTI collapsed a year ago when the company stopped paying members’ withdrawal requests and Steynberg disappeared without a trace.

MTI was successful in promoting itself on social media channels and through referral agents, who received generous commissions for introducing new members.

Implosion

The FSCA blew the MTI whistle in August last year and recommended that members demand their money back.

Read:

MTI’s marketing accelerated and it actually expanded its membership in the following months, despite the FSCA’s warning.

At the first creditor meeting earlier this year, the liquidators submitted a claim for R10 billion.

The second meeting of creditors will be held in Cape Town on Friday (December 10).

In a circular issued in August 2021, creditors were informed that the liquidators had partnered with international law enforcement agencies, including the US Federal Bureau of Investigation, to assist in the recovery of funds.

Read: US Joins Inquiry Into SA Mirror Trading’s Crypto Firm

The circular says there is still uncertainty about the whereabouts of Johann Steynberg. Although there is a paper trail in the form of a plane ticket suggesting that he fled to Brazil, there is no video or photo evidence that he actually left SA.

This has led to rumors that he never left SA, or has since returned and gone ashore.

Consultations continue

The liquidators say they will continue to investigate the circumstances that led to MTI’s collapse through the Section 417 and 418 investigations in terms of the Companies Act.

The same circular advises that those members who earned more from the plan than they contributed are classified as debtors of the liquidated company and may have to repay the funds.

Those who received less than they contributed are classified as creditors.

Additional legal case

Another legal case that has yet to be heard by the court is whether the MTI was an illegal scheme.

In the event that the liquidators succeed in having an illicit regime declared, it will no longer be necessary to argue that the liability does not exceed the asset or that the payment of profits and commissions was not for value.

This case is opposed by Clynton and Cheri Marks, two of the MTI’s most prominent leaders, who argue that if the liquidators get MTI to declare a pyramid or Ponzi scheme, the members are willing to give everything to the state.

This was refuted by the liquidators in a press release issued in August.

“If an investment plan is illegal, the earnings and referral commissions were not legally owed to the recipients of the plan,” the statement read.

“They can be recovered by the liquidators, for the benefit of those investors who effectively lost their capital invested in the illicit scheme.

“It is also not correct that the money that the liquidators can recover can be confiscated from the State,” he adds.

“The recovered funds will be used to pay the actual victims [those investors who lost their capital] a prorated portion of your claims. ”


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