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- 18 representatives of South African Ponzi scheme Mirror Trading International (MTI) must pay back $291 million to investors
- MTI claimed to be a Bitcoin trading company but was a Ponzi scheme from day 1
- The CEO fled in late 2020 with investor funds but was arrested in 2021
The suspected operators of a huge Bitcoin Ponzi scheme in South Africa have been told to pay back $291 million to victims. The 18 individuals suspected to have been behind Mirror Trading International (MTI), which was the biggest crypto scam in 2020, have been issued summonses that liquidators hope will cover the scheme’s debts. MTI is alleged to have taken $589 million worth of bitcoin across more than 471,000 deposits, with the lower figure reflecting the losses of those who put their names to the lawsuit.
MTI Was Ponzi Scheme From the Start
MTI is accused of being an unlawful Ponzi scheme that had been essentially insolvent since its inauguration, relying solely on new deposits to pay out existing investors. The scheme proposed guaranteed daily returns of 0.5% using a trading bot, but after a year of operation, in late 2020 CEO Johann Steynberg disappeared with investor funds, although he was arrested by Brazilian law enforcement in late 2021.
By the time of his arrest, deceived investors had already taken MTI to court to hold him and other individuals liable in terms of the Companies Act, arguing that the founders and operators knew full well it was crooked, as outlined in the summonses:
[The defendants] were at all relevant times aware of the fact that MTI was trading in insolvent circumstances as well as of the actions perpetrated and constituting fraud upon MTI’s creditors
The summons adds that all 18 individuals were therefore party to the fraudulent or reckless carrying on of the business of MTI and they collectively owe $291 million in order to cover the losses of the investors who filed the lawsuit.