The Financial Sector Conduct Authority (FSCA) has announced that its investigation into the alleged ponzi scheme, Mirror Trading International (MTI) is nearly complete. As a result of their findings so far, the FSCA has opened a criminal case against MTI, with the South African Police Service (SAPS) under case number (245/11/2020).
According to the announcement, the FSCA believes that MTI and its senior management are conducting an illegal operation, misleading clients and have contravened several laws. The FSCA has managed to successfully gather copious amounts of evidence to support their beliefs.
The Evidence
From August 2019, Johan Steynberg, CEO of MTI, claimed that they had employed a bot (artificial intelligence trading) together with a head trader and trading team to make all its trading decisions, which had resulted in great success. The Authority found evidence contradicting this assertion.
In October 2020, the FSCA informed MTI that it was conducting an illegal unregistered financial services business. MTI then proceeded to change its trading activities to trade in derivative instruments based on Bitcoin, arguing that it no longer fell within the jurisdiction of the FSCA, and that it no longer required a financial services provider license. This is incorrect because the submissions received from Steynberg revealed that the crypto was alleged to be traded in the form of a derivative product, which would still require registration with the FSCA. The Authority claims that they have found no evidence that any crypto trading is being conducted as communicated with members of MTI.
FXChoice, MTI’s previous FX provider, told the FSCA that they received queries from clients of MTI and in the process the clients provided FXChoice with trading statements. The source of the trading statements was MTI. The trading statements obtained were those of demo trading accounts and not live accounts. As a result, FXChoice froze the balance of the Bitcoin linked to MTI on the FXChoice platform. FXChoice told the FSCA that from 29 January 2020 – 3 June 2020, MTI deposited a total of 1846.72 BTC and made a loss of 566.68 BTC, an approximate 30% loss on the deposited amount.
MTI, Steynberg, and Cheri Marks claim that the trading activities of MTI were moved from FXChoice to Trade300, allegedly transferring all the clients’ Bitcoin from FXChoice to Trade300. MTI claimed to be experiencing the same extravagant profit using the bot. In the FSCA’s attempt to track down Trade300 a website was discovered, but was still “under maintenance” and the only reference linked to the website is the name of “Joe Steyn”, which is a known alias of Steynberg.
The FSCA recently obtained search and seizure warrants and executed them at the homes of Steynberg and Marks, and the offices of MTI. The FSCA found evidence relating to Trade300 on the desktop computer of Steynberg.
The FSCA further requested information regarding the transfer of assets from FXChoice to Trade300. MTI purported to provide proof of the transfer in the form of Bitcoin wallets, which stated that MTI transferred 16,444 BTC from FXChoice to Trade300 in 4 instalments on 21 July 2020; 22 July 2020 and 24 July 2020 respectively. The FSCA, however, found that no withdrawal of Bitcoin by MTI from FXChoice occurred in July 2020. FXChoice further confirmed that none of the eight wallets were related to FXChoice and that FXChoice had neither received deposits from nor sent any payments to any of the eight bitcoin wallets. The proof of transfers by MTI therefore, appears to be fabricated.
It appears that MTI is failing to process withdrawals. The FSCA claim to have received complaints that investors were unable to redeem their investments.
Global Crypto has reached out to Cheri Marks and Johan Steynberg for comment.
Feature image by The Viktor from flickr
