South African Court Submissions Expose Lies and Deceptive Tactics Used to Perpetuate MTI Bitcoin Ponzi Scheme

by Gordon James

South African courts have released submissions from the parties in the MTI Bitcoin Ponzi Scheme that reveal the shocking truth about the financial condition of the assets invested in the illegal scheme. This includes the revelation that the MTI entity created by the parties was intended to be a vehicle to perpetuate the scheme, rather than an entity to facilitate legitimate trading.

In the world of Bitcoin and cryptocurrency there are many investors and others who are seeking wealth. However, there are also many who are seeking a quick profit. One of the most popular ways to do this is by investing in an investment called a Ponzi scheme. The idea behind a Ponzi scheme is that it promises astronomical returns on investment. It then takes money from new investors while promising these new investors that they will be paid back based on the money they invested in the Ponzi scheme.

In the second of our series of posts on the MTI Ponzi scheme, we look at two submissions to the South Gauteng High Court by the Reserve Bank of South Africa and the South Gauteng Provincial Government that show the clarity of the state’s case against the MTI.

New documents from South Africa’s regulator, the Financial Sector Conduct Authority (FSCA), and court bailiffs have exposed the web of lies and fraudulent tactics used by Mirror Trading International’s (MTI) CEO, Johann Steinberg, and others to perpetuate the Ponzi scheme.

Unreported losses

In the report filed with the South African court, the regulator also reveals the true extent of the losses suffered by the bitcoin investment company. During what ACSE calls the first period, for example, MTI had deposited a total of nearly 51 bitcoins with Belize-based FX broker FXChoice, but 22 – or 43 percent – of those coins were lost to traders. However, multi-level marketing did not exist back then. The situation changed in the second period, however, when Steenberg allegedly introduced a computerized trading robot that falsely guaranteed a 10% daily profit. The report explains: FX Choice told the FDIC that 1,846 bitcoins had been deposited into the account between January and June 2020, but that 566 of those bitcoins (about 30 percent) had been lost. These operating results completely contradicted the wild claims of success that MTI spread through social media. FX Choice then froze the remaining 1,280 bitcoins. More recently, Steenberg claimed that all investors’ bitcoins had been transferred to a new broker, Trade 300. However, when the FSCA investigated the allegation, it concluded that Trade 300 was a fraudulent creation of Steenberg and did not exist as a bona fide broker, according to the Moneyweb report.

MTI’s ownership structure

Meanwhile, MTI’s liquidators also submitted evidence showing the true ownership structure of the bitcoin investment company. The position of the liquidators can be found in the Moneyweb report: According to the evidence submitted by the liquidators, MTI was owned on a 50/50 basis by Steenberg and Clayton Marks, who shared 10% of the profits each Monday. However, the liquidators admit that Steenberg appears to have been the only person at MTI involved with a broker in Belize and a server team in India. It forwarded the broker’s transaction results to the server team for input into the back office system, the report said.

Allegations of nepotism

Meanwhile, another MTI director, Cherie Marks, is accused of using her position in the organization to reward her assistants. For example, Marks was accused of appointing Monica Coetzee as marketing director despite her lack of qualifications. In addition, Marks is accused of increasing Coetzee’s salary from just over $1,000 per month to one BTC per month. It is expected that the High Court of the Western Cape will hear arguments from those who want a final settlement and those who oppose it as a result of these proceedings. According to the report, a hearing in the case is scheduled for the third week of June 2021. What do you think of the recent revelations about MTI’s massive losses and shareholder structure? Tell us what you think in the comments below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.The South African Securities Commission (SASC) submitted submissions to the Western Cape High Court on Thursday, in which it made compelling arguments that the MTI Bitcoin Ponzi scheme perpetrated by company principals, Danny and Dustin, was a scheme to defraud their investors.. Read more about mti calculator and let us know what you think.

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