Mirror (non)Trading International 2 - The Fallout

[Venator]

I think a large percentage of the participants know it's a scam. They just hope to make a quick buck and pull out before the collapse. They might actually make some money, and due to MTI's poor record keeping and non-existent KYC in the beginning, they'll probably get away with it. These are your serial ponzi types, that hop from scam to scam, and MLM scheme to scheme.

The ones getting in now, and the true believers that just keep 'investing' more are screwed though, so are the ones that cashed out after the KYC got implemented, they will have to pay back the money eventually.

Well, don't forget about the data leak. The authorities can get a very good idea of which people have put in tiny amounts and took out huge amounts.

 

[notayoba]

Well, don't forget about the data leak. The authorities can get a very good idea of which people have put in tiny amounts and took out huge amounts.

Yeah, but that's basically firstname, surname, email.

With no proof that those people actually signed up, and didn't get signed by friends and family without their knowledge. After KYC, when they start getting IDs, and proof of address etc it's a different story.

Although I don't understand the full workings of SARS, maybe light evidence is enough for them to send you a bill. And I guess the bitcoin transactions can be traced to where they were eventually sold for cash.

 

[EvilDarkElf]

There are 2 aspects of human psychology that probably also play a role:
1. Desperation: People are generally not willing to take big risks to get rich, but they are willing to take massive risks to avoid poverty. Think of all the people approaching pension age who get sucked in, I suspect many of them looked at their savings and saw that it would not be enough to sustain them for very long and the Ponzi/MLM scheme looked like the only option.
2. No-one likes to admit they made a mistake: There have been a few studies that showed people cling to their beliefs even harder when confronted with evidence that they are wrong, because to do otherwise would destroy their internal view of themselves

 

[RedViking]

Don't feel sorry for those who have been warned, especially those who recruited others who have been told it is not a wise decision.
I will laugh at them though when this collapse if they lost a lot of money, specially those who disowned me.
The others I hope there was some kind of justice, those who got rich from the poor's pockets.

But we all know nothing is going to come of it. They are just going to start their next ponzi scheme and the cult minions are going to follow.

 

[EvilDarkElf]

I do feel sorry for those who are already desperate only to get tipped directly into the abject poverty they were trying to avoid. The other idiots, however, may benefit from a lesson in the dangers of protecting your ego at all costs
Edit: Those driving it are, of course, morally reprehensible and deserve all the consequences the law can dish out

 

[Venator]

There are 2 aspects of human psychology that probably also play a role:
1. Desperation: People are generally not willing to take big risks to get rich, but they are willing to take massive risks to avoid poverty. Think of all the people approaching pension age who get sucked in, I suspect many of them looked at their savings and saw that it would not be enough to sustain them for very long and the Ponzi/MLM scheme looked like the only option.
2. No-one likes to admit they made a mistake: There have been a few studies that showed people cling to their beliefs even harder when confronted with evidence that they are wrong, because to do otherwise would destroy their internal view of themselves

Yeah I'm sure a very large percentage of those involved would fall precisely in those camps.

1. I totally get that desperate times can call for very desperate measures. However, neither I nor anyone else are under any moral or social obligation to accommodate, tolerate, or otherwise empathize with those who are willingly enriching themselves to the detriment of others. Profiting from a Ponzi is stealing by proxy.
IF it were up to me, when those who lost in the scheme start committing suicide, I'd want to charge those who profited from the scheme with culpable homicide.

2. Very true, and a large part of what makes these schemes get so big is narcissism in all of its forms.

 

[aofafrica]

True, but most will not make money from this. When the scheme collapses, it's gone, and they'll have lost whatever they put in but didn't pull out.

SARS taxes on accrual - not on receipt. Remember also a capital loss does not erase taxable income. Will depend on timing and just how vindictive SARS wants to be.

 

[Frikkadel23]

Im not in defense of MTI at all as I have no reason to be. But is there any proof to any of these allegations? Even the allegations regarding Cheri being the founder of BTCG and Steve being a product of her imagination?

She claims to be an an owner here

https://soundcloud.com/antimti%2Fwhatsapp-audio-2018-04-16-at-155922

thats good enough for me and the courts to decide if she knows who twain is. aka andrew caw.imho

 

[Decor13]

Yeah I'm sure a very large percentage of those involved would fall precisely in those camps.

1. I totally get that desperate times can call for very desperate measures. However, neither I nor anyone else are under any moral or social obligation to accommodate, tolerate, or otherwise empathize with those who are willingly enriching themselves to the detriment of others. Profiting from a Ponzi is stealing by proxy.
IF it were up to me, when those who lost in the scheme start committing suicide, I'd want to charge those who profited from the scheme with culpable homicide.

2. Very true, and a large part of what makes these schemes get so big is narcissism in all of its forms.

1. The Gift of Spin – getting family, friends and church members involved

2. The Ability to Ignore Inconvenient Realities – how do you wake up every morning with the weight of this crime bearing down on you?

3. Lack of Empathy – something like sociopaths and psychopaths that really do lack the empathy gene. They don’t feel the pain of hurting other people the way you or I would

4. The Ability to Suppress Guilt Feelings – they can live with guilt, no problem, just suppress it

5. Avoidance – have an answer for every uncomfortable question

6. Confidence - they don’t call them “con artists” for no reason...they can explain away uncomfortable realities

7. Greed - FOMO effect and not ever having enough

8. Gullibility - failure of social intelligence in which a person is easily tricked or manipulated into an ill-advised course of action.

9. Ignorance - sometimes it's so much easier when you don't know/want to know the whole truth

 

[Frikkadel23]

I think a large percentage of the participants know it's a scam. They just hope to make a quick buck and pull out before the collapse. They might actually make some money, and due to MTI's poor record keeping and non-existent KYC in the beginning, they'll probably get away with it. These are your serial ponzi types, that hop from scam to scam, and MLM scheme to scheme.

The ones getting in now, and the true believers that just keep 'investing' more are screwed though, so are the ones that cashed out after the KYC got implemented, they will have to pay back the money eventually.

So how i have figured out the layers of people, is this:
First layer is people with money, they know its a scam, they are in with big bucks, drawing in the second layer before pulling out
Second layer is people with a bit of spare cash, they grow the business fast, they are greedy and need more cash to pay of debts and they then draw in the third layer and some withdraw after making profit, quick in and out.
Third layer, the ignorant and desperate and greedy. this is the final layer and they are the poorest and can least afford to be in a ponzi. They keep the ponzi expanding slowly, and lose it all when it crashes. Its at this point the ponzi can sustain payments.

 

[MissKnow-a-Little]

Well, don't forget about the data leak. The authorities can get a very good idea of which people have put in tiny amounts and took out huge amounts.

Like Rich who started with $80 and now he's retired in Italy

 

[borga]

SARS taxes on accrual - not on receipt. Remember also a capital loss does not erase taxable income. Will depend on timing and just how vindictive SARS wants to be.

Bitcoins are considered financial assets as far as I understand so capital gains would apply unless you trade with it in which case it would be taxable income.

So if MTI really had a bot buying and selling bitcoins on your behalf you would likely have to pay income tax on it, but we are 99% certain there is no bot, so no trading takes place, so then capital gains could apply on the increase due to bitcoin prices if you dispose of it, but until you dispose of it this would not trigger, if you lose your coins in the collapse I would not see it as a disposal but rather theft (although it could be argued that this is still a disposal, but this could be interesting if SARS argues in court that you dispose of assets at market value at the point they are stolen). If you however benefitted from the scheme and got paid out more than you put in then yes I would agree there is a strong possibility that you will have it taxed as income and still have to repay it.

With regards to the amount not paid out accruing to you, you could probably argue in court that it was a scam and the amount never accrued in your favor since the plan was also for the conspirator to steal as much as possible, further more you could maybe argue that the accruals was capital in nature since MTI never made any income but I am not sure how successful that would be.

That said I am not a lawyer and my tax knowledge may be a few year out of date in some places, and if SARS does take that route you could be stuck with expensive legal bill even if you won.

 

[Frikkadel23]

Like Rich who started with $80 and now he's retired in Italy

yeah, thats sick, That tells me he KNOWS its a scam and knows how it works.
The tentacles of some wronged people reach all over the earth.
i hope that these people get scared.

 

[Wary GOM]

Don't feel sorry for those who have been warned, especially those who recruited others who have been told it is not a wise decision.
I will laugh at them though when this collapse if they lost a lot of money, specially those who disowned me.
The others I hope there was some kind of justice, those who got rich from the poor's pockets.

But we all know nothing is going to come of it. They are just going to start their next ponzi scheme and the cult minions are going to follow.

It is a sad world when one has to depend on angry scammed Nigerians or some South Americans to deal out justice and prevent recurrence of these schemes.

 

[Wary GOM]

1. The Gift of Spin – getting family, friends and church members involved

2. The Ability to Ignore Inconvenient Realities – how do you wake up every morning with the weight of this crime bearing down on you?

3. Lack of Empathy – something like sociopaths and psychopaths that really do lack the empathy gene. They don’t feel the pain of hurting other people the way you or I would

4. The Ability to Suppress Guilt Feelings – they can live with guilt, no problem, just suppress it

5. Avoidance – have an answer for every uncomfortable question

6. Confidence - they don’t call them “con artists” for no reason...they can explain away uncomfortable realities

7. Greed - FOMO effect and not ever having enough

8. Gullibility - failure of social intelligence in which a person is easily tricked or manipulated into an ill-advised course of action.

9. Ignorance - sometimes it's so much easier when you don't know/want to know the whole truth

A "nice" list of some of the less admirable human traits.

 

[Wary GOM]

Like Rich who started with $80 and now he's retired in Italy

Italy or Spain - not sure which, but both are EU countries where authorities are getting harder on crypto-based scams, schemes or crimes.

 

[JohnStarr]

This has been discussed before. IIRC it's likely that the authorities will just leave the small-fry be. If anyone actually does time in prison it'll be the management and the biggest promoters.

Thanks, couple of 1000 replies here so I thought I'd ask it. I've never understood if the law went after everyone, or just the big shots. By which time there's nothing left anyways as it was always a house of cards.

 

[Wary GOM]

Bitcoins are considered financial assets as far as I understand so capital gains would apply unless you trade with it in which case it would be taxable income.

So if MTI really had a bot buying and selling bitcoins on your behalf you would likely have to pay income tax on it, but we are 99% certain there is no bot, so no trading takes place, so then capital gains could apply on the increase due to bitcoin prices if you dispose of it, but until you dispose of it this would not trigger, if you lose your coins in the collapse I would not see it as a disposal but rather theft (although it could be argued that this is still a disposal, but this could be interesting if SARS argues in court that you dispose of assets at market value at the point they are stolen). If you however benefitted from the scheme and got paid out more than you put in then yes I would agree there is a strong possibility that you will have it taxed as income and still have to repay it.

With regards to the amount not paid out accruing to you, you could probably argue in court that it was a scam and the amount never accrued in your favor since the plan was also for the conspirator to steal as much as possible, further more you could maybe argue that the accruals was capital in nature since MTI never made any income but I am not sure how successful that would be.

That said I am not a lawyer and my tax knowledge may be a few year out of date in some places, and if SARS does take that route you could be stuck with expensive legal bill even if you won.

Nice. A couple of points, though.
Of course even if MTI proves to be legit and other members of this forum and I eat humble pie, SARS will still be waiting to collect income tax or whatever tax they decide is appropriate. "I don't have that money anymore, I bought a fancy car" doesn't mean anything to SARS.

The point about no trading taking place: Please if anyone investing in MTI reads this, do use this as your reason for not being responsible for taxation on reported growth of your security. You might well get off very lightly if you lost money. [The beauty of members using this excuse is that it will give proof that MTI founders, directors and senior admin were running a Ponzi. See you in court as one of the witnesses for the prosecution!]

Capital gains only kicks in after holding the investment for some time (at least 1 year, I think it is?). The fact that, used as it is by investors and MTI here, bitcoin is a security (like stocks and shares) the taxation will be as income if I read the rules correctly. This will be particularly so if you have withdrawn amounts from growth over the time you have been invested. Incidentally, even if you lose when MTI folds or is closed down, whatever you have drawn while the scheme has been running will be income as far as SARS is concerned. [The lady in the Cape who invested some millions and is drawing a nice 80K monthly income might really be crying in her Weetbix!]

 

[Frikkadel23]

Nice. A couple of points, though.
Of course even if MTI proves to be legit and other members of this forum and I eat humble pie, SARS will still be waiting to collect income tax or whatever tax they decide is appropriate. "I don't have that money anymore, I bought a fancy car" doesn't mean anything to SARS.

I don't feel sorry for the guy that put down 200k on his amarok, thinking that mti will pay for the next 60 months.

 

[expedite]

Nice. A couple of points, though.
Of course even if MTI proves to be legit and other members of this forum and I eat humble pie, SARS will still be waiting to collect income tax or whatever tax they decide is appropriate. "I don't have that money anymore, I bought a fancy car" doesn't mean anything to SARS.

The point about no trading taking place: Please if anyone investing in MTI reads this, do use this as your reason for not being responsible for taxation on reported growth of your security. You might well get off very lightly if you lost money. [The beauty of members using this excuse is that it will give proof that MTI founders, directors and senior admin were running a Ponzi. See you in court as one of the witnesses for the prosecution!]

Capital gains only kicks in after holding the investment for some time (at least 1 year, I think it is?). The fact that, used as it is by investors and MTI here, bitcoin is a security (like stocks and shares) the taxation will be as income if I read the rules correctly. This will be particularly so if you have withdrawn amounts from growth over the time you have been invested. Incidentally, even if you lose when MTI folds or is closed down, whatever you have drawn while the scheme has been running will be income as far as SARS is concerned. [The lady in the Cape who invested some millions and is drawing a nice 80K monthly income might really be crying in her Weetbix!]

They can't be legit because they are not registered with FSCA.