Read: MTI plans countersuit after FSCA raid on offices and homes of execs (Oct 28)
This created extra work, requiring the employment of 22 more technical staff by MTI.
“The system kept crashing and Johann told us that we had had numerous hacking attempts by a Russian syndicate. He sent us the details of these, some demanding extremely high ransoms.
‘Accounts may be compromised’
“On the day of the raid an independent contractor to MTI, a crypto expert was contacted, and asked to contact Camila (the senior account manager) at Trade300 [MTI’s unregulated broker] and tell her that our accounts may be compromised as a result of the raid and she must wait to hear from Johann before allowing any access to the broker account of MTI, which the contractor did immediately.
“The contractor had Trade300 contact details as we had asked him to help Johann to cryptographically prove MTI’s bitcoin balance to the FSCA and the public. Johann however did not supply the necessary details to him to complete this process.”
After the FSCA seizure of personal and company devices, Steynberg informed management that a security protocol was put in place with the broker to avoid members’ bitcoin being stolen. This included placing a limitation on withdrawals.
Management’s own bitcoin to be used
A week after the raid, Steynberg apparently requested fellow MTI executive Clynton Marks to send him 400 of his own bitcoin (worth around R137.8 million), which would supposedly be matched by 400 from Steynberg, so that backlogged withdrawal requests could be processed.
“Management has no proof that Johann did contribute the amount he stated. Clynton Marks had full confidence that he would get his bitcoin back,” according to the MTI statement.
On Monday November 30, Steynberg received an anonymous warning of an imminent raid by the FSCA, and decided he needed to “secure himself”.
On December 2, the management team found out that Johann was on his way to the airport, and received assurance that everything would be okay and that he needed to put measures in place so that if anything happened to him, his wife Nerina could run the company. He apparently flew via Doha to São Paulo in Brazil.
Management of operations
“For the weeks between the 3rd of December to the 14th of December Johann and Nerina continued to manage and run MTI’s technical department despite the challenges we faced: slow withdrawals, withdrawal reporting problems on the server side, a server that needed upgrades and better protection,” says MTI.
On December 12, Clynton Marks became concerned at the lack of contact with Steynberg when he failed to log onto the company computer system as expected.
The following day MTI management told Johann they refused to work with him any longer unless he appointed a proper second in charge who could run things in his absence. Steynberg wanted his wife to be that person, but eventually agreed to the appointment of an outside contractor.
Marks was later sent an instruction email on how to run the company.
MTI’s server team, unaware of the change in corporate reporting arrangements, was hesitant to accept orders from anyone other than Steynberg as it had been expressly instructed to only ever deal with him.
It then came to management’s attention that no server upgrade had been done as Steynberg had previously indicated.
Bitcoin needed to honour withdrawals not forthcoming
“To date of writing this statement the bitcoin requested to honour withdrawals has not been paid out from Trade300 and there is no valid reason for this.
“Over 34 emails have been sent to Trade300 in the last 6 days to resolve this matter,” says the MTI statement.
“Nerina [Steynberg] told us not to tell members about Johann being missing, and that she was sure he would turn up.”
Nerina was instructed to open a missing person’s case, but has failed to do so, according to the statement.
On December 16, MTI paid a private investigator to find Johann. “Nerina was not happy about that. The investigator interviewed Nerina, she refused to be recorded and was not forthcoming with information.
“The MTI Nedbank account, to which only Nerina and Johann has full access, has been suspended,” according to the statement.
“Our head of corporate services was locked out of the account and the logins have been changed.
“Nerina informed us only today [the statement is dated Tuesday, December 22] that Johann had booked a return flight and that his return date was the 22nd of December 2020.
“This was news to us; not once during the last week or after his departure was that ever communicated to us. We are convinced she has control over his funds and the team of management and leaders were promised she could run MTI in Johann’s absence.”
FSCA theory correct?
FSCA head of enforcement Brandon Topham says he is aware of the communique from MTI management, and it appears to confirm the FSCA’s theory that Steynberg was operating the engine of the company without allowing his lieutenants into its inner workings.
There are still confusing messages coming out about MTI and the safety of the 17 000 bitcoin (worth about R5.6 billion) reported to be under its control.
A Telegram message forwarded to Moneyweb says management now has control over the server and that the trading platform confirmed the balance, but members will have to wait until Monday to confirm that the bitcoin is safe.
