Mirror Trading victims to recover 50%-60% of their money back
The liquidators overseeing the Mirror Trading International (MTI) pyramid scheme said they could start returning funds to victims once they receive a court ruling on how to handle claims.
The winding-up process for MTI has been complex due to limited legal precedents to rely on. One issue revolves around how to calculate the value of bitcoin deposits made into MTI, whether it should be based on the South African rand value at the time of deposit or at the point of the scheme’s collapse.
While there are reports of victims receiving between 50% and 60% of their money back, the liquidators stated that the amount will vary as they receive more claims.
In the US, a Texas court ordered Mirror Trading International Proprietary Limited (MTI) last month to pay $1.7 billion in restitution and penalties. The record-breaking fine was in connection with accusing the South African crypto firm and its chief of running a large-scale fraud scheme involving Bitcoin.
Per the court papers, MTI CEO Johannes Steynberg will pay $1.7 billion in restitution to victims who were defrauded by the scheme, while another $1.7 billion will be imposed as a civil penalty. This is the highest civil monetary penalty ever ordered in any commodities or cryptocurrency case, according to the Commodity Futures Trading Commission (CFTC).
The CFTC has originally brough the charges against Steynberg and his business back in June 2022, alleging that they accepted 29,421 BTC for running an unlicensed commodity pool between May 2018 and March 2021. The scheme defrauded 23,000 investors in the US and elsewhere out of more than $1.7 billion at the time of acceptance.
Steynberg founded MTI in April 2019, which quickly became one of the fastest-growing cryptocurrency trading platforms in the world, with a reported user base of over 260,000 individuals. The platform’s success was falsely attributed to its unique trading algorithm, which used artificial intelligence and machine learning to analyze market trends and make profitable trades on behalf of its users.
However, in late 2020, MTI’s operations came under scrutiny, with allegations of fraud and misconduct being leveled against the company. In early 2021, MTI was placed under provisional liquidation by a South African court, and Steynberg was arrested on charges of fraud and racketeering.