Of the R1.1bn in bitcoin recovered by the joint liquidators in 2021, only R550m remained by December 2024.
While thousands of investors in Mirror Trading International (MTI) around the world are being pursued by liquidators for recovery of bitcoin they received from the failed scheme, information passed on to Moneyweb shows that the MTI estate had dwindled from R1.1 billion in 2021 to around R550 million by December 2024.
MTI liquidators recovered 1 280 bitcoin in 2021 from a Belize-based broker called FX Choice, which was used by MTI founder Johann Steynberg for forex trading. This was sold in SA for about R1.1 billion.
This suggests that just half of the original fund remains, without any dividends being paid to creditors.
What is not known is how much was earned on interest on the original bitcoin funds recovered, nor how much additional bitcoin has been recovered – but these would have increased the value of the estate.
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Billions unaccounted for
Moneyweb directed questions to the liquidators and and their UK solicitors Farrer & Co, but did not receive a reply.
We know from a 2024 court filing by auditor Jan Dekker that R627 million was in the fund at the time.
An amount of R120.4 million in fees was paid to liquidators according to the June 2023 liquidation and distribution account.
The South African Revenue Service (Sars) was paid out R283 million after an agreement was reached with liquidators. Sars initially claimed R931 million in back taxes and penalties but then settled on the lower amount. These two payments – to the liquidators and Sars – would have reduced the MTI pot by just over R400 million.
Most of the balance appears to have gone on legal fees in SA and around the world.
It is this that has outraged investors who are now being asked to repay any bitcoin they withdrew from the fund before its collapse in December 2020 – but at today’s prices.
That means some investors are being asked to pay back up to six times what they withdrew.
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Most invested in 2020 when the bitcoin price ranged from around $7 000 to $29 000. They are being asked to repay at today’s prices of around $120 000.
Should the liquidators succeed in this approach – bearing in mind they recently suffered a setback in the UK court – some stand to lose their houses.
Moneyweb previously reported on the case of Ben Janse van Vuuren, who invested R20 000 in MTI in July 2020 but withdrew his funds, then worth R21 000, a few months later when he suspected he might be involved in a scam. He was then asked to repay the 0.13 bitcoin he withdrew at the updated price of R97 000.
He, like hundreds of other MTI investors, decided to lawyer up under the wing of attorney John Lister, who is highly critical of the way the liquidators have been running up legal fees at the expense of creditors.
Several MTI investors say their offers of settlement have been rejected by the liquidators.
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The largest creditor is the US Commodity Futures Trading Commission (CFTC), which filed a case against MTI for operating an unregistered commodity pool and misappropriating bitcoin, resulting in a court order for MTI to pay over $1.7 billion (R30 billion) in restitution to defrauded victims.
Investors had lodged claims of R1.62 billion as of April 2024.
“It’s not just idle speculation that the liquidators have been prolifically spending money that belongs to the insolvent estate of Johann Steynberg, and prejudicing its creditors,” says Lister.
He argues that the liquidators have no right to summons investors since the 1 280 bitcoin recovered from FX Choice in 2021 were under Steynberg’s personal name – not MTI. That being the case, the trustees of Steynberg’s sequestrated estate are the ones who should bring legal action for the recovery of bitcoin received.
Many UK and South African investors are raising the prescription defence against the liquidators, though there is some dispute as to when the prescription clock expired, with many arguing that happened on 9 April 2024.
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The liquidators dispute this, and the matter will have to be decided by the courts.
Lister says he is amending his pleadings to deny that his clients received bitcoin from MTI but from Steynberg directly. Therefore, the only party with a claim is the trustees of the Steynberg estate.
In a letter to the master of the high court, Lister says the liquidators “also need to be advised that the 10% commission they may have been earning in relation to investors who have paid the increased BTC value will have to be repaid”.
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Background to MTI
MTI was declared the largest crypto scam of 2020 by research company Chainalysis.
Investors in the scheme were promised up to 10% a month from automated forex trading, which involved cashing out bitcoin and trading it on the forex markets.
When the Financial Sector Conduct Authority (FSCA) investigated, it found no evidence on automated trading. Any claims of successful trading were likewise debunked by FX Choice, which reported that MTI and Steynberg had rapidly depleted the funds being traded.
It was a typical Ponzi scheme, with old investors being paid from funds received from new recruits. Those who introduced new members stood to make 10% commissions, and more in many cases.
Many MTI investors became millionaires by recruiting new members, and without investing any funds of their own.
Steynberg fled SA in late 2020 for Brazil after the FSCA warned the public about MTI. The company stopped processing requests for withdrawals, leading to the liquidation of the company.
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Steynberg was arrested by Brazilian police in 2021 for using false ID documents and fined about R595 000, with a three-and-a-half-year sentence that was commuted to an additional fine.
He was awaiting extradition to SA when it was reported in the Brazilian press that he had died of a heart attack in April 2024. Some believe he faked his death and made off with (another) new identity and thousands of missing bitcoin.
The Dekker auditor report says 32 285 bitcoin were paid out to investors before its collapse, leaving a shortfall of 6 908, worth about $770 million (R13.8 billion).
Tracking down this missing bitcoin has so far proved impossible. If Steynberg faked his death and is holding this missing bitcoin, he would have enough funds to start a new life under a new identity.
An MTI Action Group has been established in defence of investors. It can be reached via email [email protected] or telegram https://t.me/mtiactiongroup.
This article was republished from Moneyweb. Read the original here.
