AMERICA’S Federal Bureau of Investigations (FBI) is joining forces with the liquidators of automated forex trading company Mirror Trading International (MIT) in the interest of several US and local investors.
The joint liquidators, consisting of five experienced trustee groups appointed by the Master of the Court after the Financial Services Conduct Authority (FSCA) found MTI was a dubious venture and that no trading took place, had meetings with international law enforcement agencies including the FBI, after being approached by them.
The focus of the investigations was on MTI's chief architect Johann Steynberg, whose whereabouts are unknown though there were pointers he obtained a flight ticket to Brazil, which too has baffled sleuths as there was no confirmation that he left America.
Steynberg infomed the FSCA that MTI, with a claimed R2.9 billion in clients' funds, accepted investments in Bitcoin, pooled the money into one trading account on a forex trading platform, and conducted high frequency trading through the utilisation of a Bot.
According to a statement from the MTI yesterday, international law enforcement agencies such as the FBI had therefore also been informed accordingly.
Meanwhile, after the court granted the final liquidation order, it was revealed opposing parties, namely the couple Clynton and Cheri Marks, filed arguments in which they questioned the FSCA's procedure and the implications of the liquidation order.
Clynton Marks, who even years before the collapse of MTI openly did marketing on social media for fraud schemes such as the Russian MMM scheme by promising returns of 30 percent per month, now partly argued that the application to declare MTI as an illegal scheme, as well as the liquidation order, was merely aimed at getting investors' money into the hands of the state.
Marks further argued the Master had also warned against it. The joint liquidators said the assumptions of Marks were entirely wrong.
"It is not correct that having the business model of MTI declared a fraudulent scheme would allow the liquidators to seize all of the money that flowed into the scheme.
“In terms of the relevant provisions of the Insolvency Act, the liquidators will only be entitled to recover payments made to investors which were not legally owed to them.
"It is also not correct that the money the liquidators may be able to recover could be forfeited to the state. Funds recovered will be utilised to pay the real victims a pro-rata portion of their claims.
"It is important to note many investors in MTI received tens of millions of rand worth of Bitcoin, more than they had initially invested, through fictitious profits and commissions and bonuses. As all the evidence clearly shows that there was no profitable trading in MTI, it is a foregone conclusion these profits and commissions were simply paid with the funds derived from new or long-term investors in MTI, who represent the actual victims and, by definition, creditors of MTI.“
MTI had encouraged potential investors to invest in it by advertising its "Trading Bot" as a tool to grow members' Bitcoin by between 0.5 percent and 1.5 percent per day.
After the FSCA conducted an investigation and the disclosure of data was revealed by the group Anonymous ZA, the FSCA said MTI was a multifaceted marketing scheme that did not have enough assets to cover its obligations.
As a result, the company was provisionally liquidated at the end of 2020.
The application to declare MTI an illegal scheme will be heard on September 8, 2021.
BUSINESS REPORT ONLINE