All the countries where scammers in South Africa’s biggest pyramid scheme ever are getting nailed

People who profited from Mirror Trading International around the world may look forward to receiving a summons or letter of demand from the scam’s liquidators in South Africa.

Correspondence between law firm Schabort & Potgieter and the liquidators has revealed in which countries they have instituted proceedings and where it may still go after scammers.

The letter, dated 11 April 2024, was filed as part of a pack of court documents responding to an attempt to convert the pyramid scheme’s liquidation into a business rescue.

It lists 84 countries, with the lawyers not pursuing matters further or recommending against it for various reasons in 35.

Reasons for not pursuing include the value of the possible recoveries being too low, challenges locating corresponding attorneys, and where the legal environment was not conducive.

Mirror Trading International (MTI) was the biggest pyramid scheme ever operated in South Africa, with 39,193.3 bitcoins deposited into the scam over its lifetime.

Even using the much lower price of R500,000 per bitcoin at the time of the scheme’s collapse, MTI would be an almost R19.6 billion scam.

It launched in 2019 and drew in serial scammers and victims worldwide by promising average monthly returns of 10%.

MTI’s explosive growth was fuelled by a network marketing scheme that offered ways to earn substantial bonuses by recruiting more members into the pyramid.

Timing was also a factor — the world was locked down following the outbreak of the Covid-19 pandemic. With many people cooped up and desperate for income, the circumstances provided fertile ground for MTI to grow into the world’s biggest crypto scam of 2020.

MTI made headlines in September 2020 when a group calling itself Anonymous ZA exploited vulnerabilities in the scheme’s poorly-coded website.

Together with a MyBroadband investigative journalist and community members, the group exposed the inner workings of MTI.

The scheme collapsed in December 2020 after its founder and CEO, Johann Steynberg, disappeared while travelling in Brazil.

Steynberg was arrested in Brazil almost exactly a year later for using a fake ID and was facing extradition.

Last month, a Brazilian news outlet reported that Steynberg had died after suffering a massive bilateral pulmonary thromboembolism.

Johann Steynberg, former Mirror Trading International CEO, in a video promoting the scam

However, while Steynberg was a key figure behind MTI, many others profited from the scheme. It is also suspected that there may be many other kingpins.

South Africa’s National Prosecuting Authority has confirmed that it is investigating possible criminal charges against MTI’s masterminds.

Meanwhile, the scheme’s liquidators have begun aggressively pursuing anyone who withdrew bitcoin from the scheme, including serving summonses on hundreds of former MTI members in South Africa.

The liquidators have also applied for recognition as the designated bankruptcy proceeding in several jurisdictions.

Their attorneys issued 187 letters of demand in the United States, followed by 149 adversary complaints and an omnibus motion in the state of Florida.

In Canada, attorneys have served nineteen statements of claim on known individuals, and twelve against John and Jane Does.

“Our correspondent is working with tracers to identify and locate the 12 unknown defendants,” Schabort & Potgieter stated.

In the UK, attorneys have traced 58 investors, all of which withdrew more than a bitcoin (R1.3 million).

One debtor has made a settlement offer of £65,000 (R1.56 million), which was accepted.

In Belgium, the liquidators’ attorneys served an omnibus motion against 15 investors, each owing more than ₿0.5 (R670 million).

Seven former MTI members in the country have voluntarily paid over €8,765.28 (R178,000).

“We further confirm that approximately 229 investors received a letter of demand either by way of registered mail, email, or both,” said Schabort & Potgieter.

“Of these investors, approximately 40 have replied and we are currently assisting our correspondent in responding.”

In Namibia, their correspondent traced 244 investors who withdrew more than ₿0.1 (R134,000).

“The court was requested to allow service via email and WhatsApp and to direct the defendants to view a copy of the summons on the E-Justice System of Namibia,” the attorneys reported.

“It was decided not to serve the summons by way of publication and eventual personal service as the cost thereof would have exceeded approximately R500,000 for publication in two newspapers.”

In Australia, the correspondent attorneys were instructed to trace 129 investors.

“Once we receive the trace results, we will start drafting and serving the letters of demand to these investors,” the lawyers said.

In Sweden, attorneys are preparing letters of demand to serve on 37 investors who withdrew between ₿0.2 and ₿45, with a total withdrawal value of ₿56.34.

Attorneys have also traced two investors in Botswana, one of which withdrew ₿27.89 and the other ₿0.64.

In Germany, attorneys intend to pursue legal action against 55 investors who withdrew over one bitcoin.

The liquidators have also instructed their correspondent to issue letters of demand against people who withdrew less than a bitcoin.

The table below summarises the 61 countries for which Schabort & Potgieter provided more detailed feedback.

The 23 other countries where members were not being pursued and their estimated bitcoin withdrawal amounts were covered in a previous article.