LEGAL | Investors in MTI, South Africa’s Largest Bitcoin Ponzi, Resist Repayment Demands from Liquidator

According to reports in South Africa, investors of Mirror Trading International (MTI) are resisting demands from liquidators to repay any Bitcoin withdrawn from the Ponzi scheme at current market prices.

SCAM | Nearly 8,000 Victims of the South African Bitcoin Scam, MTI, to be Refunded by Liquidators

Liquidators were able to recover 1,281 bitcoins that MTI’s former brokerage, FXChoice, had frozen which they immediately sold on the South African cryptocurrency exchange Luno,…

— BitKE (@BitcoinKE) October 12, 2023

In a letter to the Master of the Cape High Court, attorney John Lister of Lister & Company, says he acts for about 415 investors who are being sued by MTI liquidators for the return of bitcoin withdrawn from the scheme, or if that’s not possible, the return of the equivalent value in rands – but at today’s prices.

For illustration, there is 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 may be involved in a scam. The amount involved in this case was 0.13 bitcoin. The price of bitcoin has shot up since 2020, which meant Van Vuuren would have to pay the liquidators R97 000.

In April 2023, the Cape High Court ruled that MTI was an illegal scheme and all agreements between the company and investors were void from the outset. At the same time, the scheme’s CEO, Cornelius Johannes Steynberg, was ordered by a US judge to pay over $3.4 billion in fines and restitution for the Bitcoin fraud scheme.

The scheme, which was declared to be by far the biggest scan in 2020 globally, is thought to have received between 29,421 to 46,000 bitcoins and is the biggest pyramid or Ponzi-like scheme in South Africa’s history.

South Africa’s Mirror Trading International (MTI) Was By Far 2020’s Biggest Scam Globally, Says Chainalysis 2021 Crypto Crime Report: @chainalysis @FSCA_ZA

— BitKE (@BitcoinKE) February 12, 2021


Three Classes of Investors

According to reports, investors who contributed to the fund have been delineated into three classes by a South African court in November 2023:

First Class: Investors who contributed funds but received no returns should be entitled to submit a claim against the MTI estate equal to their initial investment. This amount should be calculated in Rands at the time of the investment.

Second Class: Investors who withdrew less than their initial investment would need to account for any returns received. Any gains received would diminish the size of their claim against MTI. Judge Maher stipulated that investments and returns should be calculated in Rands at the time of investment and withdrawal, respectively.

Third Class: Investors who withdrew more than they initially invested would not have a claim against MTI. Instead, liquidators would seek the repayment of profits received, calculated in Rands at the time of receipt.

According to Lawyer Lister,  Class 2 and 3 investors are rightfully displeased, arguing that they are being unfairly penalized. This situation also raises constitutional concerns regarding equity and fairness in treatment.

The case of Van Vuuren serves as an example of the potential harm MTI investors may face. His 0.13 Bitcoin, valued at R20,000 in July 2020, is now equivalent to R122,000, calculated based on a Bitcoin price of R940,000.

If Bitcoin were to increase to R3 million in the future, Van Vuuren would be requested to repay R366,000. However, what Van Vuuren proposes is to repay the actual profit he received, which amounted to R1,000 – the disparity between the R20,000 he initially deposited and the R21,000 he ultimately received.




Follow us on Twitter for the latest posts and updates

Join and interact with our Telegram community



Leave a Reply