Global Courant 2023-04-28 12:07:20
Mirror Trading International – which has the honor of being called one of the largest crypto scams in the world – has been officially declared a pyramid scheme by the South African Supreme Courts.
In a ruling this week, the Western Cape Supreme Court said the trading platform “clearly amounted to an illegitimate Ponzi scheme” and terminated all agreements between the group and its investors.
The scheme presented itself as a passive source of income. According to its own statements, users would simply deposit a minimum of $100 worth of Bitcoin, and MTI promised to grow it using AI-powered foreign exchange trading software.
The group said clients were able to achieve a consistent daily return of 0.5%, which translates into a 500% annual profit. Algorithmic trading is a common starting point for many cryptocurrency investment scams.
However, the courts found no evidence that trading took place and that the so-called “artificial intelligence bot” never existed. The remarkable trading results presented to investors, meanwhile, were simply false.
MTI was provisionally liquidated on December 29, 2020, and a final winding-up order was issued against the settlement on June 30, 2021.
The platform first made headlines in September 2020 when a group calling itself Anonymous ZA exploited vulnerabilities in its poorly coded website. Together with a MyBroadband investigative journalist and community members, the group exposed the inner workings of MTI.
Data company Chainalysis named MTI the biggest investment scam of 2020.
Trouble for MTI boss
Johann Steynberg, CEO of MTI, traveled to Brazil in the weeks before MTI finally imploded, and was arrested a year later for allegedly handing a fake passport to the police.
That is what the Commodity Futures Trading Commission (CFTC) in the United States has done ordered Steynberg is paying nearly $3.5 billion (R63.6 billion) in restitution and fines for the scheme.
“The order finds Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited MTI, a company currently in liquidation in the Republic of South Africa, liable for fraud in connection with foreign currency retail transactions, fraud by a related person of a commodity pool operator, registration violations and non-compliance with CPO regulations,” the CFTC said.
The order requires Steynberg to pay $1.7 billion in restitution to defrauded victims and a $1.7 billion civil fine, which is the highest civil fine imposed in a CFTC case, it said.
“The warrant finds that, from approximately May 2018 to approximately March 2021, Steynberg, individually and as the controlling person of MTI, was involved in an international multi-level fraudulent marketing scheme to solicit Bitcoin from members of the public for participation in a unregistered commodity pool MTI. had surgery.
“MTI and Stynberg controlled the commodity pool and traded ostensibly off-exchange, retail forex through what they falsely claimed was a proprietary ‘bot’ or software program.
“During this period, Steynberg, individually and as principal and agent of MTI, accepted at least 29,421 Bitcoin – worth more than $1,733,838,372 at the end of March 2021 – from at least 23,000 individuals in the US, and even more around the world , to participate in the resource pool without being registered as a CPO as required.
“Either directly or indirectly, the defendants have embezzled all the Bitcoin they accepted from pool participants.”
Read: South Africa’s MTI named as the biggest crypto investment scam in the world
