The award for the World’s Biggest Bitcoin Scam of 2020 goes to Mirror Trading International (as declared by Chainalysis). MTI has been ordered into liquidation by South Africa’s Western Cape High Court after being shut down for operating a financial service without a licence and for misleading investors.
An amount of 8,000 Bitcoin (currently worth around US$268 million) has been traced and found in addition to the 1,281 bitcoin already recovered from broker FX Choice. Liquidators believe they will be able to track down more of the bitcoin in question, estimated to be around 29,000 in total.
Liquidators Aiming to Recover as Much BTC as Possible
We obviously want to recover as much money as possible for members, particularly the elderly and the vulnerable. It’s important for members to know that they will not be required to pay into the estate just because they benefited from withdrawals. It merely means their claims will be reduced by the amount that they have already received in terms of withdrawals. If they paid in for example, R30,000, and withdrew R10,000, this means their claim against MTI would be reduced from R30,000 to R20,000.
Riaan van Rooyen, joint liquidator
MTI’s Commissions-Based Franchise Fraud
Mirror Trading International operated as a typical multi-level marketing system pyramid scheme where members were rewarded with commissions of 10 percent on money invested by new referrals, from their “down line”. MTI had an estimated 280,000 accounts by the time it was shut down in December, but liquidators suspect that the real number could be half once bogus accounts in the name of pet goldfish and the family dog are ruled out.
Liquidators will return to court in September to argue MTI should be declared a Ponzi scheme.
In related news from South Africa, Ameer and Raees Cajee – the brothers behind Cape Town-based crypto investment platform Africrypt – disappeared last month under suspicious circumstances along with 69,000 bitcoin belonging to their clients.
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