MTI circular provides insight into liquidation mess
An “MTI Circular” has provided further insight into the recent February 4th second meeting of MTI creditors.
After reading an initial report on the meeting and then watching it, I was left less than impressed.
Instead of being shut down by authorities and the scammers behind it arrested, Mirror Trading International was put into liquidation in late 2020.
Over a year later, with respect to victim restitution, nothing much has happened.
Seeking to address this, court-appointed liquidators put out a “circular to creditors” on February 11th.
Unfounded allegations were levelled against the liquidators. As this meeting was not the correct forum to respond to all those issues, Mr Tintinger, on our behalf responded in general terms, but also made it clear that the liquidators will answer any queries that may be raised by legitimate creditors and have an open-door policy in that regard.
Sounds promising, but
Mr Tintinger emphasized during the meeting that the liquidators are wary to communicate with groups of creditors or people professing to present groups of people, where there are conflicting interests, in other words where there are winners and losers in the same group.
While I agree on the issue of net-winners and losers being grouped together is problematic, a single communication portal would solve this issue.
Liquidators (want) to ensure that the interest of actual creditors of MTI are looked after and not being influenced or dictated by group leaders, who might not have the same interests.
That would of course require verification of MTI investors, which for some reason liquidators seem unwilling or unable to do.
Instead, they’re passing the buck onto others.
If a creditor is part of a group, the liquidators still implore on creditors to, within the group, establish that all participants have the same interests and fully declare their status as creditors.
Regarding the rejection of victim claims, the circular states;
After the second meeting, a wrong perception was created that the liquidators are rejecting all claims of creditors.
This is simply false and again misinformation being spread to discourage actual creditors to prove their claims.
I quite distinctly recall hearing the Master of the Court reject all victim claims because they were “illegible”.
Victims file claims with the liquidators, who then present them to the court. If the Master of the Court isn’t doing anything abnormal, then liquidators very much deserve to be lambasted for stuffing up the claims process.
If they’re forwarding claims they know are going to be rejected (for whatever reason), they need to be held to task for that too.
The onus is on liquidators to provide net-losers clear instructions on what is required, collect claims, perform some sort of validation and then present those claims to the court.
Instead you have this nonsense; liquidators admitting they don’t know what the court wants, but also encouraging claims be filed.
Mr Tintinger explained to the Master that the liquidators have taken extensive advice on the format of creditors’ claims in MTI and were advised that it would be prudent for them to approach the High Court for directions on how to advise creditors to frame their claims.
That application is being finalized at the moment.
The liquidators keep on encouraging investors to lodge their claims with the estate.
Given we’re over a year in, I can’t see this as anything less than a complete failure of duty of care to MTI’s victims.
Liquidators do state they plan to “scrutinize” claims as per whatever guidance they receive from the court, but why are these claims being submitted for rejection in the first place?
Talk about shooting yourself in the foot.
Another blow to MTI victims is liquidators finally confirming the status of the 8000 BTC they tracked down last July.
After extensive further investigations, the liquidators concluded that they do not have a legal basis to claim ownership or the value of the relevant bitcoin.
Details? Nah. That’s all you get.
At the time the 8000 BTC announcement was made, liquidators stated they
believe(d) they will be able to track down more of the estimated 29,000 bitcoin that flowed into MTI.
Given there have been no follow up announcements, I’m going to go out on a limb and predict there won’t be any additional recovery.
One positive for MTI victims is the claim that liquidators have not been “remunerated one cent yet”.
Good. Hopefully that stays that way until demonstrably meaningful action is taken.
Another point of interest in the report is Johann Steynberg’s status.
Steynberg’s arrest is a very positive development and the liquidators hope that he is extradited and brought to justice as soon as possible.
The liquidators had a very positive high-level meeting with the investigating and prosecuting authorities last week in Cape Town and have received assurances that international processes are on-going.
So as not to compromise these processes, we cannot say more about the process now, but rest assured that no stone will be left unturned in this regard.
This suggests Steynberg might yet be extradited to South Africa. Personally I was hoping it’d be the US.
It comes down to which country filed the international arrest warrant, which for some reason we still don’t know.
You may not know this, but after the FSCA had moved in on MTI during July 2020 and circulated a cautionary notice, Steynberg and his cohorts, fraudulently represented to investors and the FSCA that the Bitcoin of MTI was moved to a new trader platform, known as Trade 300.
Trade 300 was a sham created by Steynberg.
Despite the sham, Ulrich Roux, the attorney for MTI at the time, confirmed in a letter in October 2020 that 16 444 bitcoin were transferred in four tranches over the period from 21 July 2020 to 24 July 2020 to Trade 300.
What was reported by the management of MTI to Attorney Roux (which he then disseminated to the public) was a lie and a fraud on investors and the FSCA.
Was Steynberg acting alone?
His focus was on the bot simulation pretending trades every day. In addition, he attended to the bitcoin movements.
Cheri Marks and Clynton Marks and close family (all previously involved in spectacularly failed schemes, including BTC Global) ran the MTI machine and proclaimed, as a fact, the daily positive trades and actively discouraged members of the scheme from heeding the sound and transparent advice and cautions offered by the regulator, the FSCA and various other very public critics.
Clynton Marks shared profits with Steynberg weekly.
Losers should not be fooled into the idea that it is simply a scheme that collapsed due to bad trading. It never was.
It was a scheme ran by top tier investors and promoters to milk bitcoin from later investors and the lower tiers daily
Here’s hoping prosecutors do their job and finally go after the Marks family. They are quite obviously the ones who ran the show and primarily profited.
Since Mirror Trading International’s December 2020 collapse, the Marks family have remained at large in South Africa.
Speaking of the Marks, Clynton Marks’ ridiculous assertion that MTI didn’t collapse is thankfully addressed.
Our forensic team has established, with information presently at their disposal, that the difference between bitcoin deposited and withdrawn, was at least 10800 bitcoin.
MTI, according to its own records, represented to investors that it still had 18 700 bitcoin in its wallets as at 17 October 2020.
According to MTI’s records, the number of bitcoin which was supposed to be in MTI in December 2020, when it imploded, was approximately 22 000. The liquidators have only been able to recover 1282 bitcoin to date.
This was not due to the making of Steynberg and his cohorts, but simply due to the fortuitousness of FX Choice blocking the wallet in which these coins were held.
All other bitcoin were either stolen, or paid to investors who withdrew bitcoin at an earlier stage.
Stolen by Steynberg, the Marks family and other net-winners.
All the participants who abused the compensation provisions of MTI, are quasi-accomplices and will be exposed.
Losers have the right to know who benefitted unlawfully from the scheme, at their expenses.
As the legal process against the individuals develop, particulars will be made available to the creditors of MTI.
Looking forward, the High Court has yet to determine whether MTI was an “unlawful scheme”.
For their part, the liquidators feel confident.
MTI was a massive fraudulent scam and this will remain the position, irrespective of whether the High Court is prepared to grant the declaratory order.
It does not automatically follow that, if the High Court were not prepared to declare the scheme unlawful at this stage, MTI is then considered to be a lawful scheme.
It will simply have the effect that the liquidators will have to prove the unlawfulness each time that they rely on that fact in a recovery process.
Here’s hoping that doesn’t happen.
The High Court is scheduled to hold a hearing on MTI’s legal status on March 2nd.