Secret Mirror Trading International creditors’ meeting called
Mirror Trading International’s liquidators have quietly scheduled a meeting of creditors for 09:00 on Friday, 1 April 2022.
No notice of the meeting was posted to the liquidators’ website or to a public Telegram channel where members of the scheme follow developments in the case.
The liquidators only appear to have given notice of the meeting in the Government Gazette.
The notice is buried on page 235 of Gazette No. 46022, published on 11 March 2022.
According to the notice, the meeting will be held at the Master of the High Court’s office in Cape Town with “proof of claims” on the agenda.
It is unclear whether the meeting will be streamed online, as past meetings have been, or whether there will be a recording.
Mirror Trading International (MTI) was a bitcoin-based network marketing scam claiming to offer automated trading services — initially in forex and later in cryptocurrency derivatives.
Chainalysis named MTI the biggest cryptocurrency scam of 2020.
MyBroadband exposed the inner workings of MTI in September 2020 thanks to a data leak from a group calling itself Anonymous ZA.
The scheme collapsed at the end of 2020 after CEO and founder Johann Steynberg vanished, apparently while travelling in Brazil.
Steynberg was arrested in Brazil on 29 December 2021 — a year after he disappeared — when he allegedly presented fake identification to law enforcement officers.
Court documents last estimated that 29,421.03379 bitcoin flowed through MTI — nearly R21 billion at current exchange rates.
A source with knowledge of the case told MyBroadband that a subsequent analysis revealed that over 46,000 bitcoin (R32.8 billion) passed through the scheme.
The liquidators reclaimed 1,281 bitcoin in early 2021 from Belize-based brokerage FXChoice with the help of South Africa’s Financial Sector Conduct Authority.
They immediately liquidated the cryptocurrency upon returning it to South Africa, receiving around R1.1 billion.
Johann Steynberg arrested in Brazil in December 2021
This is not the first time MTI’s liquidators have surprised creditors with an unexpected manoeuvre.
In November 2021, the liquidators rejected all claims at the first meeting of creditors.
According to the liquidators, this was to avoid wasting time debating bad claims and having creditors foot the legal bills for days of worthless debate.
During the second meeting of creditors on 4 February, the liquidators supported the Master of the Court’s decision to only recognise one claim — that of the sequestrated estate of one of Steynberg’s companies.
This allowed the liquidators to pass their resolutions, effectively granting themselves a blank cheque, while voting down the proposed resolutions of 50% shareholder Clynton Marks.
Marks had proposed that a committee of former members be established to oversee the liquidators’ decisions. The liquidators said this would’ve been a bad idea, as it would only have served to slow the liquidation down.
On 3 March, at a court hearing to have MTI declared an unlawful scheme, the liquidators made a deal with a controversial group called GetaQuid, represented by JC Kriel.
Under the terms of the deal, the liquidators agreed to pay victims an initial dividend.
While no amount was specified, MyBroadband heard from several people in court that the liquidators would pay an initial amount of 20c in the rand.
However, the deal is only valid if the court declares MTI a pyramid scheme.
Therefore, those who want to take the deal must withdraw any opposition to the liquidators’ application.
1.1 billion reasons to be suspicious
As a result of these surprise moves, there is mistrust between some creditors and the liquidators.
It should be noted that the liquidators are facing a hostile and well-resourced subset of former MTI members who stand to lose money if it is declared a pyramid scheme.
However, some creditors are also concerned that the clandestine actions by the liquidators will give them sweeping powers, allowing them to enrich themselves while leaving victims with nothing.
MyBroadband contacted MTI’s liquidators for comment, but they did not respond by the time of publication.
Update (30 March) — Feedback from the liquidators
In response to MyBroadband’s questions, the liquidators said the following legal procedures need to be explained:
- The referred meeting entails attesting to the legality of claims already in possession of the liquidators.
- Such a meeting is one of many to follow — where claims received by the liquidators will be considered.
- The liquidators continually receive claims that they must submit to the Master at a special meeting designed for the sole purpose to submit further claims.
- Due to the volume and nature of the claims submitted, the Master will probably reprocess the claims.
- The legal process is followed in terms of which the liquidators will, after the meeting has been closed, consider and accept the claims (if the said claim is correct).
- During the meeting, claims will be considered and nothing else. Since it is the sole purpose of the meeting to consider claims, no other matter will be dealt with during the meeting.
- If any creditor personally wishes to have his/her claim verified at such meeting, he/she is welcome to do so, but the Master will consider the claim together with all the other claims submitted.
The liquidators contend that they did announce this meeting to creditors other than through the Government Gazette.
“At the second meeting of creditors, it was announced that various further meetings would be held with the sole purpose of validating claims,” they said.
“The sole purpose of the meeting is to present the claims to the Master for consideration — no discussion will take place.”
For this reason, the meeting will not be streamed and there won’t be a recording, the liquidators said.
Update (1 April) — Meeting postponed
Master of the High Court Zukile Mabusela was unable to preside over the meeting today on Friday to unforeseen circumstances.
The meeting was postponed until 8 April 2022.
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