Liquidators for crypto scam Mirror Trading International are going after the liquidators of Johann Steynberg’s estate as they try to recover R4.7bn. From Moneyweb.
Two sets of liquidators are squaring up over the spoils of the Mirror Trading International (MTI) crypto scam that came crashing down in 2020.
Earlier this year, the Western Cape High Court declared MTI a Ponzi scheme, paving the way for the recovery of funds from those who benefitted from the scheme.
Now, MTI liquidators are going after the liquidators of the estate of MTI founder and CEO Johann Steynberg, who fled to Brazil when the scheme imploded in December 2020. He is currently in prison in Brazil, awaiting extradition back to SA. The MTI liquidator recently filed an intention to amend its pleadings, providing specific information on who it believes benefitted most from the scheme.
Cited as defendants in court papers before the Western Cape High Court are the two trustees of Stenberg’s insolvent estate, Jacques Fischer and Reunert Kharivhe. Also cited are 17 of the presumed big winners in the MTI scheme, including Clynton and Cherie Marks, Charles Ward, Frederick Rademan, and Steynberg’s wife Nerina.
Missing bitcoin
The court papers show a difference of 6 900 bitcoin (BTC), worth roughly R4.7 billion, between what was deposited into MTI and what was withdrawn. This is the amount liquidators say is owed to MTI creditors. The former management and marketing teams are unable to explain what happened to the missing 6 900 BTC.
At the time of its collapse, MTI was reckoned to have sucked in 22 222 BTC, worth R14.7 billion at current market rates, according to the court papers. The MTI liquidators are only pursuing the missing 6 900 BTC.
Nineteen respondents have been cited in the court papers on the grounds that these were the proceeds of fraud and constituted an undue preference.
Johann Steynberg operated 77 separate accounts in MTI and is presumed to have knowledge of the missing BTC. Court papers suggest he illegally received more than 28 BTC after the company was liquidated, not counting the bitcoin he received “for no value” prior to this.
Another big winner was Cherie Marks, previously head of marketing at MTI, who is reckoned to have received 192 BTC more than she deposited.
Linking defendants to ‘crime scene’
The problem MTI liquidators now face is linking the defendants directly to the BTC and, therefore, to the ‘scene of the crime’.
MTI’s software system allowed participants to open accounts under pseudonyms, and many did, using the names of pets, children or domestic servants. The benefit of doing this was to earn an extra 10% in commissions on new referrals, even if it was your own money.
Though the court papers appear to have unravelled much of the dealings, lawyers for the defendants are likely to demand more specifics from the MTI liquidators – specifically, how to link the MTI accounts with the BTC blockchain. BTC cashed out through an exchange enforcing Know Your Customer ID checks could be traced, but there’s also a chance that much of this bitcoin is hoarded in untraceable wallets.
Read: Nearly 90% of MTI’s 304 000 ‘members’ were slave accounts
So far, the MTI liquidators have recovered more than 1 200 BTC from the Belize-based broker FXChoice used by MTI, and sold this for R1.1 billion.
MTI was rated the largest crypto scam of 2020 by Chainalysis. It lured tens of thousands of investors worldwide with the promise of earning up to 10% a month through forex trading using a computer bot. This turned out to be a Ponzi scheme, with funds from newer investors being used to pay out older ones, with 10% commissions being paid for anyone introducing new members.
MTI liquidators say an unknown amount of BTC was shipped to gambling platforms.
