Investors who have already withdrawn money from Mirror Trading International (MTI) may have to pay it back.
This according to Financial Sector Conduct Authority’s (FCSA) divisional executive of enforcement, Brandon Topham. Topham explained in an interview with Simon Brown on MoneywebNow, that you cannot make money from an alleged crime and that all indications are that MTI was a massive Ponzi scheme.
This follows the final liquidation of the advertising Finalmente Global linked to the scheme, as well as the collapse of MTI after its CEO Johann Steynberg fled the country with over R5 billion worth of investors’ bitcoin.
Topham said that according to the South African common law, liquidators are in a position to claim money back from participants of an illegal scheme.
“It is common law in South Africa. So, if you’ve been a participant in an unlawful scheme, the liquidators are in a position to claim that money back.
‘The ball is in your court’
Topham explained that the process of getting the money back from the investors will be costly for the liquidators and that since it doesn’t have a time limit it can be done preferably at the expense of other creditors.
“The investors best bet is to approach the liquidators and try and do an arrangement with them to pay back only the interest, or the unlawful return. There are cases where liquidators can settle with the creditors,” said Topham.
Topham also said that the whole ordeal was similar to a Ponzi scheme because the people behind the scheme get in early and they bring in other people, and they try to get out. And nobody comes after them.
Topham urged people not to engage in investments that are not approved by the Financial Services Board. Potential investors can go to the FSCA website to check the companies operating license.
Cut and run
Steynberg apparently left the country on 3 December 2020 and hasn’t been seen since.
According to a statement released by MTI management on 19 December, he remained in contact with them until the middle of December and then seemingly went off the grid and has since been uncontactable.
Several months ago, the Financial Sector Conduct Authority (FSCA) issued a warning to the public to steer clear of MTI, which promised returns of up to 10% a month using a computerised trading algorithm which was claimed to have lost only one day out of 200.
To participate in the scheme, members had to buy bitcoin and ship it to a wallet apparently controlled by Steynberg. This means that the bitcoin now cannot be accessed following his disappearance.
This article first appeared on Moneyweb and was republished with permission.
Additional reporting by Ciaran Ryan.