Business / Business News

Ina Opperman
Business Journalist
5 minute read
12 Nov 2021
4:00 pm

This is what the MTI liquidators have found so far

Ina Opperman

The scheme ran into billions and was called the biggest crypto scam ever

Picture: iStock

This is what the Mirror Trading International (MTI) liquidators found so far: 1,281 bitcoins, three immovable properties worth approximately R6.5 million, more crypto wallets in the Seychelles, silver worth approximately R1.4 million and two expensive 2020 model Jaguar SUVs bought for approximately R3.2 million.

The liquidators also found that the kingpin, Johann Steynberg, paid R933,000 through his company, LNX Online, into the bank account of his wife, Nerine Steynberg. She testified at the liquidators’ inquiry that this money was not owed to her and that she considered it a contribution by her husband to the household expenses. She will now face several claims for repayment of these amounts.

The scam ran into billions and was called the biggest crypto scam ever. Steynberg fled in December last year and according to rumours, he was in Brazil and Panama. He has not been found yet.

Six final liquidators were appointed at the first meeting of MTI creditors with the Master of the High Court on 5 November 2021. The liquidators are Herman Bester, Riaan van Rooyen, Jacolien Barnard, Deidre Basson, Christopher Roos and Chavonnes Coopers.

ALSO READ: MTI bitcoin scam kingpin now being hunted by the FBI

MTI liquidation has made massive progress

According to the liquidators they have made massive progress so far, interrogating nearly 60 role players, including “some masterminds trying to masquerade as legitimate creditors with valid claims”, who were unmasked.

They scrutinised all new claims to ensure duplicate or fake accounts were not registered, due to the massive fraud, dubious trading platforms, excessive commissions and fictional transactions that were rife before Steynberg, who presented himself to investors as the CEO, disappeared.

The liquidators have scheduled a second creditors’ meeting for 10 December 2021 in line with stipulations of the Companies Act, where a detailed progress report from the liquidators will be tabled. Since the final liquidation of MTI at the end of June, various investigations have been done where vast amounts of crucial information were obtained that will help with further discoveries.

The liquidators say they have made the following progress so far:

  • Sold/liquidated the approximately 1,281 bitcoins from crypto platform FX Choice.
  • Gathered a vast volume of very crucial information about the affairs of MTI and the dealings of Johann Steynberg and those associated with him, including the management structure of MTI.
  • Retrieved the authenticated MTI back-office database from Maxtra in India, which is the key to all other legal processes to follow.
  • Filing of a sworn affidavit from FX Choice.
  • Obtaining a sworn affidavit from Keith Badenhorst, the alleged creator of the trading bot.
  • Obtaining the complete set of FX Choice trading statements regarding all accounts associated with MTI and Steynberg.
  • Independently verifying the finding of the FSCA that the Trade300 e-mail domain was owned by Steynberg.
  • Investigators also found potential crypto wallets linked to MTI and Steynberg in the Seychelles and silver valued at about R1.4 million.
  • Numerous further claims against third parties have also been identified and will be pursued by the Steynberg trustees.

ALSO READ: Mirror Trading International bitcoin scam investors to pay back the money

This is who the liquidators are after

“Regarding claims of some so-called MTI management members or heads of departments, it was clearly discovered that they received excessive remuneration packages and since approximately October 2020, an additional bitcoin per person per month,” the liquidators said in a statement.

“It undoubtedly constitutes dispositions without value and it is doubtful that any employee can still have a claim for arrear salaries against MTI. As for suppliers, the evidence collected in questioning confirmed that most suppliers were paid via JNX Online.”

The liquidators are still focusing on the so-called top 200 winners, who were already identified and who collectively profited from the total amount of approximately R700 million. They say the interrogations provided invaluable information so far.

ALSO READ: Money down the drain: Bitcoin scheme Mirror Trading International to be liquidated

Challenges for liquidators of MTI

Some of the challenges the liquidators identified in recovering profits from investors will be to further verify and corroborate specific data, especially since:

  • No know-your-client (KYC) system was in place.
  • Account holders are mostly not identified by name, but rather a chosen username and e-mail address/cellphone number.
  • The system did not prevent account holders from opening numerous duplicate accounts.
  • Several hacks were done on the database, such as the one allegedly done a few days before Steynberg disappeared.

The liquidators say that although the scheme has not yet been declared unlawful by the court, the evidence provided under oath as part of the application papers conclusively proves that it is illegal.

The evidence they obtained through the inquiry and other investigations enabled the liquidators to successfully apply for the final sequestration of Steynberg’s estate. An application to “collapse” Dulospan (Pty) Ltd into Steynberg’s insolvent estate was also successful.

Steynberg used Dulospan to acquire three immovable properties worth approximately R6.5 million and according to information obtained from Nerina Steynberg, cryptocurrency worth approximately R2.1 million was transferred to a wallet opened for this purpose by the trustees of Steynberg’s insolvent estate.

ALSO READ: Bitcoin scammers Mirror Trading International face R100 million fine

This is where the payments came from

JNX Online was finally liquidated in August. Steynberg used it to buy and sell bitcoin most probably derived from MTI and pay numerous creditors and certain employees of MTI. Its bank statements showed the monthly payments totalling R933,000 made to Nerina.

JNX is also the registered owner of two 2020 model Jaguar SUVs, with a purchase price of about R3.2 million, paid in cash during 2020. According to Nerina’s attorneys, these vehicles are safe and will be handed over.

The liquidators say that the liquidation of JNX will enable a further investigation and recovery of substantial amounts that flowed from its bank account to numerous third parties.