Just two weeks after news that Mirror Trading International pyramid scheme founder, Johann Steynberg, died from a heart attack in Brazil, where he was waiting for his extradition hearing, the so-called winners in the scheme who withdrew more bitcoin than they deposited have now received summonses claiming back the profit they made.
In addition, Clynton Marks, reportedly Steynbergs partner in MTI, failed in March to have the liquidator of MTI removed after he made various allegations against them. All he got was a punitive cost order for his spurious claims.
Marks also tried in 2022 to prevent the scheme from being declared illegal, with adv Sydney Alberts arguing for Marks that, based on material evidence, trading did take place and trying to base this on marketing material submitted. However, the matter was later withdrawn.
The Western Cape High Court then declared the business model of Mirror Trading International (MTI) an unlawful pyramid scheme and its agreements with about 200000 of its members void.
This means that all the so-called winners in the scheme, that was described as the biggest pyramid scheme in the world by Chainalysis, will have to return all their profits, which amount to millions of rands.
Statement from liquidatorsInvestrust, the liquidators of MTI, published this statement last week directed at members and investors in the scheme that was declared a pyramid scheme in April last year:
The liquidators of MTI have obtained an order in the High Court of South Africa (Western Cape Division), authorising substituted service of summonses issued by the liquidators against investors/members who withdrew more bitcoin from MTI than the number of bitcoin invested in MTI by them.
In those summonses the liquidators claim return, alternatively payment of the value, of the bitcoin so withdrawn in excess of the bitcoin invested.
This means that the High Court granted the liquidators legal permission to serve a summons against investors or members claiming that MTI investors and members who withdrew more bitcoin than they deposited into MTI return the difference or pay it off.
The court also granted permission for liquidators to send it to members using various electronic methods, such as email and WhatsApp.
MTI was placed under provisional liquidation on 29 December 2020 and Investrust was appointed as part of the schemes liquidators.
This is where it all began for Mirror Trading InternationalSteynberg started MTI in April 2019 as an automated Bitcoin trading platform and investors deposited a prescribed minimum amount of Bitcoin in MTIs wallet which MTI said would grow by between 0.5% and 1.5% per day using a Trading Bot.
Investors could earn even bigger returns if they referred other investors. Thousands of people invested in MTI. But the scheme started to collapse when the Financial Sector Conduct Authority (FSCA) started investigating it.
Steynberg then allegedly moved the funds to a new broker, Trade 300, but the FSCA later found that Trade 300 was a fictitious platform Steynberg created.
The company was provisionally liquidated at the end of 2020 and finally liquidated on 30 June 2021.
Meanwhile, Steynberg fled the country and was arrested by police in Brazil in December 2021 for using fake documents.
He was apparently the only person who had access to the cryptocurrency codes.
The National Prosecuting Authority has applied for his extradition to South Africa and he died waiting for his hearing.
