Who is Mirror Trading International?
MTI is a Ponzi/Pyramid scheme that made headlines in September 2020 when a group calling itself Anonymous ZA exploited vulnerabilities in its poorly coded website.
Together with a MyBroadband journalist and community members, the group exposed the inner workings of MTI.
The scheme finally collapsed in December 2020 when MTI CEO Johann Steynberg disappeared while travelling in Brazil.
Steynberg resurfaced almost exactly a year later when Brazilian law enforcement arrested him for allegedly presenting a fake ID.
MTI is credited by Chainalysis as the biggest crypto ponzi scam to date and it is also believed to be the biggest ponzi scheme in South African history.
The Krion pyramid scheme took more than R1.5 billion from about 14,000 South African investors over nearly four years, leaving many in poverty.
MTI on the other hand makes this look insignificant as it took nearly R40 Billion by some estimates in less than 2 years.
What did MTI promise?
MTI proudly boasted that its bot trading capabilities were consistently generating profits at an impressive average of 10% per month!
According to MTI’s website, their automated trading software has consistently generated a daily profit of 0.5%.
This translates to an impressive yearly growth rate of over 180% if trading daily, or approximately 130% per annum with five trading days a week.
What did they deliver?
Heartache and Pain. Not much more needs to be said.
Not only did they relieve everyday hard-working South Africans of their cash but also wiped the pension pots of thousands of unsuspecting pensioners in South Africa and beyond.
How did they do it?
The Bait
Numerous individuals commenting on the matter contend that the genesis of this debacle can be traced back to a prior undertaking known as BTC Global.
Regrettably, this venture collapsed when its Founder, who went by the name of “Mark Twain,” allegedly absconded with all the funds.
There have been allegations that Clinton and Cheri Marks were behind this scheme, although no evidence has been presented or proven in a court of law.
There is a theory which suggests that the individuals who had suffered losses in BTC Global were seen as potential targets for John Steynberg, the Marks’ and MTI.
They portrayed themselves as the saviours with their miraculous trading bot, preying on the naivety of the investors.
The Switch
Allegedly the bulk of the “losers” in BTC Global switched over to MTI to recoup their losses.
However, this time round they weren’t simply investors, they became recruiters. In the process, thousands of new investors joined the scheme.
This became so easy and profitable that everyone started doing it and in some cases, individuals were signing up family members without them even knowing.
Some took out loans against their homes or resigned from their jobs in order to get access to funds in their pension pots.
“We really thought that we struck gold. My father used his pension and I resigned from my job in the traffic department so that I could use my pension funds. My upline recruiter promised me that I would get rich in less than 6 months. He even showed me how much money he was withdrawing in Bitcoin to prove that the system works. I lost everything” – Danita Scrooby
The Collapse of MTI
In September 2020, Anonymous ZA released financial information about MTI online. The data was obtained from MTI’s members portal, mymticlub.com.
Anonymous ZA exposed significant security vulnerabilities in MTI’s online systems and skillfully utilized them to extract crucial information regarding the inner workings of the scheme.
Subsequently, Anonymous ZA released an anonymised version of the data, which accurately reflected the state as of 14 September 2020. This was made available on MTILeaks, a dark web platform.
According to the MTI database, the company has processed more than 22,984 bitcoins in member deposits.
Who Were the Main Players of the Scheme?
Johann Steynberg – Founder, CEO, Head of Technical and Research and Development Department
Some believe Steynberg was the fall guy for the entire scam whilst others believe he instigated the whole circus after learning of the instant riches on offer from the BTC Global scam.
It is important to note that whilst the allegation has been made that Steynberg is the brains and held the keys to the supposed digital revolution they were touting, he doesn’t seem to hold any technical qualifications nor have any verified sources come forward to attest to his technical prowess.
According to the CIPC Steynberg was the CEO of the company but only a 50% shareholder.
Clynton Marks – Head of Referral Program and Members
Mr Marks does not appear to have a history in technology companies but was a 50% shareholder in MTI and also the Upline to Mr Steynberg.
He effectively held the top two accounts in the pyramid scheme according to the leaked data.
Charles Ward – Head of Strategy Implementation
Brother to Cheri Ward and brother-in-law to Clynton Marks. Following the disappearance of Johann Steynberg, Charlie proceeded to scrub his Facebook account of any information relating to MTI.
This is a common exit strategy for promoters and shills to “wash” their social media accounts and delete any evidence that they were involved in past scams upon the collapse.
Charles Ward was seen supporting Cheri Ward in a Facebook video after the disappearance of Steynberg, promising that he already implemented a strategy to get Steynberg back to South Africa using silver that Steynberg’s wife allegedly held.
Monica Coetzee – Head of Corporate Services
Monica Coetzee’s journey in MTI began when she was appointed by Cheri Marks, the marketing executive. Initially serving as a non-executive director, she later transitioned to the role of an executive director.
With a background as an estate agent and legal secretary, Monica’s skills were put to work in her new position.
Her starting salary stood at R15,000 per month, which was subsequently raised to R40,000. In an intriguing twist, she later received one bitcoin every month, valued at approximately R500,000.
These payments were facilitated by Steynberg through a service provider known as Coin Buyers Club.
Cheri Marks – Head of Communications and Marketing
She describes herself as having a decade’s worth of experience as a corporate trainer and presenter. Cheri has proven herself to be a serial Ponzi scheme addict, some naming her the “The Queen of Ponzi Schemes” and “The Ponzi Princess”.
As a career Ponzi scheme enthusiast, she has been behind and involved in many online schemes such as BTC Global, Mirror Trading International, My Daily Choice, Syntek, MMM and Copy Profit Success Global.
Vincent “Vince” Ward – Head of International Expansion
Vincent “Vince” Ward, was the Head of International Expansion at Mirror Trading International. He is also the brother of Cheri Ward. He was previously involved in Syntek and has a long-standing history of interest in MLMs
Leonard Gray – Head of Legal
It is believed that Leonard was married to Cheri Ward (formerly Marks), before her current marriage to Clynton Marks (it is currently thought that they have separated according to news reports).
He is a non-practicing attorney. As the Head of Legal, Leonard has on multiple occasions sent legal threats via WhatsApp & Facebook to persons questioning the legality of MTI.
Other Noteworthy Account holders
- The list of top Bitcoin withdrawers reveals multiple accounts associated with the email address of Ignatius Bell and linked to both Ignatius and his brother Marinus Bell. Notably, the Bell brothers are affiliated with the Spirit Word church located in Stilfontein.
- Willie Breedt, a distinguished individual and a member of the Founder Pool in MTI, deserves recognition. Through careful analysis of the email address associated with his account in MTILeaks, it becomes apparent that he is indeed the same person who previously held the position of CEO at the now-defunct VaultAge Solutions.News24 reported earlier this year that Breedt is accused of scamming around 2,000 investors out of an estimated R227 million through VaultAge.
When Liquidators Get Involved…
Mirror Trading International’s liquidators have allocated a substantial sum of R90,243,021.55 towards legal fees and consultation expenses following their assumption of control over the estate of the Bitcoin-based network marketing scam.
They have disbursed a total of R113,007,185.31 and reserved R135,017,551.60 as their fee for when the case is concluded.
This is according to a Provisional Liquidators Account leaked on the MyBroadband forum.
This reveals that the liquidators have managed to recoup a mere R14 million, a modest sum in comparison to their expenditure.
Victims or “net losers” of the scheme have not yet received any repayment.
Through a fortunate twist of fate, and with the assistance of the Financial Sector Conduct Authority, the liquidators successfully retrieved 1,281 Bitcoin that had been frozen by MTI’s former brokerage, FXChoice.
With impeccable timing, they swiftly sold the Bitcoin on the cryptocurrency exchange, Luno, at a remarkably favourable price, resulting in an impressive payday of close to R1.1 billion for the estate.
Subsequently, the document indicates that the liquidators spared no expense in their relentless pursuit of recovering additional funds.
They have a sum of R46,613,872.48 for legal expenses incurred in connection with interrogations, investigations, and transcription.
An additional amount of R16,696,086.72 was disbursed for the provision of “crypto investigation services”.
As of 23 January 2023, the liquidators have only managed to recover R14,175,149.04 for all the expenses incurred.
The liquidators anticipate a significant rise in the funds recovered from MTI’s “net-winners” over time. However, it remains uncertain how expenditures will also increase during the duration required to conclude the case.
There is a saying amongst liquidators and lawyers “If a liquidator pays out to a creditor, then they haven’t done their job properly”.
Other legal fees and costs came to R26,246,633.52, with R22,457,902.25 set aside for the taxman.
MTI Provisional Liquidators Account — 23 January 2023
|
Cost item |
Amount |
|
Defending liquidation application |
R588,061 |
|
Interrogations, investigations, and |
R46,613,872.48 |
|
Crypto investigation services |
R16,696,086.72 |
|
Media liaison |
R404,629.34 |
|
SARS (Income Tax) |
R22,457,902.25 |
|
Other legal fees, costs |
R26,246,633.52 |
|
Total disbursements |
R113,007,185.31 |
|
Liquidators fees reserved |
R135,017,551.60 |
When the editorial team of MyBroadband contacted MTI’s liquidators for comment, they stated the leaked document was an internal concept document that had not yet been tabled in the public domain.
The liquidators declined to answer further questions about the accuracy of the figures on the record.
What will Happen Going Forward?
Investors
Investors are hoping to recoup their funds but this is unlikely.
Some rumours have been doing the round since August 2023 that an amount of up to 60 cents in the Rand will be paid back to investors.
The liquidators have not commented on these rumours and it is likely that they were started by one of the many “recovery schemes” that have sprung into life since this saga began.
Liquidators
As with most liquidations, the liquidators and lawyers tend to be the net winners and it seems no different in the MTI case.
Ultimately they have a role to play and a function to perform in order to bring this sordid affair to a close.
If the Krion case was anything to go by, this may drag on for another 5 years if not more!
Johan Steynberg
Steynberg disappeared in December 2020 and was arrested in Brazil almost exactly a year later in December 2021 as a result of using falsified identity documents.
Languishing in a Brazilian Prison for the moment, it is anyone’s guess what will happen to Steynberg and whether any of the bitcoins he has access to will ever be recovered.
There are currently extradition proceedings pending but not much appears to have happened on this front.
In the US, a Texas judge has ordered Steynberg to pay back $3.4 billion.
Clynton Marks
Mr Marks appears to have lodged quite a few appeals in the ongoing saga, and the multimillion-dollar mansion he shared with Cheri Ward is currently up for sale.
There does not appear to be any repercussions from his involvement in the BTC Global scam and no legal action has been taken yet in terms of his involvement with MTI.
Cheri Marks Ward
Ms Ward has scrubbed her social media profiles of any involvement with MTI and appears to have severed her relationship with Mr Marks.
It is unclear if any future action will be taken against her or if any payments to her will be clawed back by the liquidators.
Regulations and Enforcement
Although many people have tried to get a comment from the FSCA (the Financial Services Conduct Authority) in terms of their procedures to warn citizens before it is too late, there doesn’t seem to be any concrete procedure or process.
For example, they issued a warning against Karatbars after it became apparent that it was too late to save investors, but have yet to issue a warning regarding what many believe to be a reboot of Karatbars, GS Partners.
How to Spot a Ponzi Scheme
Spotting a Ponzi scheme can be easier than you think. One red flag to watch for is if the investment promises unusually high returns, especially if there are limited risks involved.
You should also be wary of investments that require you to recruit other people into the scheme in order to earn more money.
Check out who is running the investment – if it’s someone with no prior experience or not regulated by a governing body, those can also be signs of a Ponzi scheme.
Moreover, don’t trust any investment that tells you it’s too good to be true – because chances are, it probably is!
How to Protect Yourself When Investing in Cryptocurrencies
When it comes to investing in cryptocurrencies, it’s important to be smart and protect yourself.
Do your research on the coins you are interested in and make sure you understand the risks associated with them.
Invest only what you can afford to lose, and never give out personal information or passwords.
Additionally, use a reputable exchange and secure wallet to store your assets.
Finally, stay vigilant and regularly monitor your investments for any suspicious activity.
By Gareth Grobler – RELBORG.COM
