The Cape Town High Court has granted a provisional liquidation order against Mirror Trading International (MTI) on 29 December 2020.
“The Master of the High Court will now appoint a provisional liquidator to urgently take control of the assets and liabilities of MTI,” said Anyuschka Nett, partner attorney at Luitingh and Associates.
While Luitingh and Associates were not the attorneys who filed the case that was heard today, they were also seeking a provisional liquidation order against MTI on behalf of their client, Steven Watkins.
The case heard today was brought by Vezi & De Beer Inc on behalf of their client, Anton Lee.
Both notices of motion and founding affidavits are embedded at the end of the article.
Vezi & De Beer Inc are campaigning for the appointment of Mr AW van Rooyen from Investrust as the liquidator.
Luitingh and Associates are advocating for the appointment of Mr Kurt Robert Knoop from Manci & Knoop Financial Services as the liquidator.
Nett said that MTI members should visit mtiliquidation.co.za and complete a nomination form for Manci & Knoop so that they may be appointed as the liquidator. This will also help the liquidators have a better understanding of the extent of what is owed to creditors in the scheme, Luitingh and Associates stated.
The order, which MyBroadband has seen, was handed down by Justice Rogers.
It stated the following:
- The rule nisi is issued, calling upon all persons interested to show cause, if any, on Monday 1 March 2021 at 10h00, or as soon thereafter as the application may be heard, why a final order for MTI’s liquidation should not be granted.
- The Sheriff of the Court shall attach all property that appears to belong to MTI.
The collapse of Mirror Trading International
MTI was a scheme that claimed to offer automated forex and later, cryptocurrency trading services.
Members bought into the scheme with a minimum of $100 worth of bitcoin, or a minimum of $200 if they wanted to qualify for bonuses under the company’s multilevel marketing system.
In August 2020, the Financial Services Conduct Authority of South Africa (FSCA) said that it was investigating MTI and warned investors that they should withdraw their funds.
Prior to that, the Texas State Securities Board issued an emergency cease-and-desist order against MTI and accused it of perpetrating fraud through an illegal international multilevel marketing programme.
Canada’s Autorité des Marchés Financiers (AMF) also placed MTI on its list of illegal online platforms, issuing a warning that MTI illegally solicits investors.
In September, MyBroadband reported on a group calling itself Anonymous ZA which leaked an anonymised copy of MTI’s entire database — including account names, e-mail addresses and bitcoin balances. They called it the MTILeaks.
The MTILeaks showed that as of 14 September 2020, MTI had received 22,984 bitcoin in deposits.
Before the latest surge in the price of bitcoin, this was worth around R6.4 billion. At current exchange rates this amount of bitcoin is worth over R9 billion.
MTI itself has indicated that its “trading pool” had grown from over 17,000 bitcoin in September to over 23,000 bitcoin in December. It therefore stands to reason that the capital taken in by the scheme stood at well over 23,000 bitcoin before deposits were shut down.
On 26 October, the FSCA raided the offices and homes of MTI leaders, seizing electronic and telephonic records from cell phones, notebooks, and PCs at the three locations.
On 12 November, the FSCA filed criminal charges against MTI with the South African Police Service in Stellenbosch.
MyBroadband called the SAPS offices in Stellenbosch to confirm that the case (CAS 245/11/2020) was opened. We were informed that the case had been transferred to the Cape Town branch.
On 19 December, MTI management informed members that Johann had gone missing while travelling abroad and that a missing persons case had been filed. They also informed members that they had received an automated emergency email stating that Johann had not logged into the MTI system for 12 hours.
“This security protocol email provided critical info for the team to start the process of working without Johann. (Up till that point Johann was the only one with authority to deal with the broker & technical team),” the notice to members stated.
On 22 December, a collective identifying themselves as the MTI leadership and management issued a statement which said that they did not know whether members investments were safe, and that they had been unable to get members’ bitcoin from their “unregulated broker” with which to pay withdrawals.
On 23 December, at least two applications for provisional liquidation were filed against MTI in the Western Cape Hight Court. The first of these applications has now been granted on 29 December.