First South African arrest in Mirror Trading International case
An alleged net beneficiary of Mirror Trading International has been arrested after failing to appear before a Section 417/418 enquiry called by the scheme’s liquidators.
Multiple sources have informed MyBroadband that Phillip Botha was arrested and must appear before a magistrate to explain why he should not be remanded to custody.
Sections 417 and 418 of the Companies Act essentially allow liquidators to carry out a private enquiry to investigate the affairs of an insolvent business, including summoning and examining people capable of giving information about the company.
Mirror Trading International (MTI) was a network marketing scam that claimed to offer automated bitcoin-based trading services — initially in forex and later in cryptocurrency derivatives.
According to documents MyBroadband had seen, MTI started as a mirror trading system in 2019 but quickly morphed into a network marketing scheme when it posted consecutive months of significant losses.
Before MTI’s collapse, the Texan and Canadian financial regulators issued warnings and bans against the scheme.
The Financial Sector Conduct Authority of South Africa (FSCA) soon followed with its own warning in August 2020, going so far as to recommend that investors withdraw their money as quickly as possible.
MTI made headlines in September 2020 after MyBroadband exposed the inner workings of the scheme, thanks to a report from a group calling itself Anonymous ZA.
In October 2020, the FSCA raided MTI’s offices in Stellenbosch, as well as the homes of CEO Johann Steynberg in Polokwane and 50% shareholder Clynton Marks in Durban.
Steynberg disappeared in December 2020, shortly after investors started complaining that they were struggling to get their withdrawals processed.
The scheme promptly collapsed, and two groups rushed to lodge liquidation applications against the company.
Chainalysis named MTI the biggest cryptocurrency scam of 2020.
Johann Steynberg, Mirror Trading International CEO
Court documents gave the last estimate of the funds that flowed through MTI as 29,421.03379 bitcoin — over R17.8 billion at current exchange rates.
However, a source with knowledge of the case told MyBroadband that the latest analysis shows that more than 46,000 bitcoin (over R27.8 billion) flowed through the scheme.
Steynberg was arrested in Brazil a year after he disappeared, on 29 December 2021, after allegedly presenting fake identification to law enforcement officers.
Since the collapse of MTI, there has been much legal wrangling during the liquidation proceedings, including a group of members opposing an application from the liquidators declaring it a pyramid scheme.
At least two groups have also successfully challenged the liquidators’ summons to appear for a Section 417/418 enquiry.
MTI shareholder Clynton Marks and his wife Cheri, who headed up communications, won their application not to appear for a second round of questioning from the liquidators.
Another group comprising Nico Boshoff, Usher Bell, Marinus Bell, Ignatius Bell, Nico van der Merwe, and Gerald Lassen also had the liquidators’ summons against them dismissed.
Judge Baartman ruled that subjecting them to interrogation would be an invasive public event that could not be undone.
However, Baartman also said she did not believe the applicants had a solid case to oppose MTI being declared an unlawful scheme.
MyBroadband contacted the legal representative for Phillip Botha for comment on his arrest, but they did not respond by the time of publication.
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