Acting Justice Alma de Wet has granted the final liquidation order against Mirror Trading International (MTI) after a protracted battle to reverse the provisional liquidation of the get-rich-quick scheme and instead place it under business rescue.
An intervening application by the liquidators to have MTI declared an unlawful business was postponed until 8 September 2021.
Those who wish to oppose the liquidators’ intervening application have until 30 July to file their answering affidavits.
The liquidators then have until 13 August to file responding affidavits and must file their heads of argument before 24 August.
The successful liquidation application was put together by Advocate Vaughn Victor and filed by Vezi De Beer Inc. Attorneys.
Victor is embroiled in several other cases against schemes like VaultAge Solutions, Bitclub Network, BTC Global, and Thrive International.
MTI was a South African network marketing scam that claimed to offer automated trading services — initially in forex and later in cryptocurrency derivatives. It accumulated billions of rand worth of bitcoin during 2019 and 2020.
Chainalysis named MTI the biggest cryptocurrency scam of 2020 in the most recent edition of its Crypto Crime Report.
Court documents, which MyBroadband has seen, gave the last estimate of the funds that flowed through MTI as 29,421.03379 bitcoin — close to R15 billion at current local exchange rates.
Between 2019 and 2020 MTI went through a few iterations, but its surge in growth came after it adopted a multilevel marketing referral system.
Prior to its network marketing rewards system, MTI appeared to operate more like a conventional “copy trading” service.
Part of MTI’s pitch was that CEO Johann Steynberg, together with his team of technical gurus, had developed a magical trading “bot” powered by artificial intelligence that could generate returns of 0.5% to 1.5% per day in members’ bitcoin.
Many people warned that the promised returns were too good to be true and that MTI was a scam.
MTI collapsed in late 2020, as warned, with the scheme’s leadership blaming Johann Steynberg who allegedly disappeared in Brazil on 15 December.
A group of members acted quickly and instituted liquidation proceedings against MTI within days of the announcement that Steynberg had gone missing.
The Cape Town High Court granted a provisional liquidation on 29 December 2020 and provisional liquidators were appointed on 12 January 2021.
After several delays, the final liquidation hearing was held on 15 June, and judgement was reserved.
With the help of FSCA, the provisional liquidators appointed to the MTI case have already recovered over 1,200 bitcoin which MTI’s former Belize-based broker, FX Choice, had frozen.
Reportedly this bitcoin has already been converted to fiat currency. This was done before the recent crash in the bitcoin price, meaning that the liquidators may have already recovered around R1 billion on behalf of MTI’s creditors.