MTI net-winners subject to BTC clawbacks (and it’s a mess)
Thus far Mirror Trading International liquidation proceedings are seemingly unable to be anything but confusing across all aspects.
How MTI net-winner clawbacks are being handled is of course no exception.
The first eye-opener is, seemingly because MTI operated its Ponzi scheme through bitcoin, that net-winners are required to pay back what they stole in bitcoin.
This doesn’t factor in the fiat value of bitcoin when the money was stolen or, more importantly, what the difference is today.
One example cited by Moneyweb sees one MTI net-winner invest 20,000 ZAR. Before MTI collapsed in late 2020, the investor was able to withdraw “close to” 21,000 ZAR.
The clawback is 1000 ZAR but the problem is the investor is being slugged for the full amount withdrawn… in bitcoin.
Today, the withdrawn amount of bitcoin comes to 97,000 ZAR.
Had bitcoin of dumped lower than what it was in 2020, this could have worked in favor of the investors. Something something, play stupid games with monopoly money win stupid prizes I guess.
If the clawback process were to stop there, naturally there’s the issue of net-winners paying back a hell of a lot more than they stole.
Wouldn’t be an issue if funds were kept in bitcoin but, let’s face it, nobody wants to be “crypto rich” (a term often synonymous with “bagholder”).
Anyway, getting back to MTI’s clawbacks, the process would be far more efficient if actual investment (not reinvestment of non-existent monopoly money), was subtracted from withdrawal amounts, and the leftover amount was payable in bitcoin.
Require net-winners to come up with the bitcoin and leave how they do it up to them. See “stupid games, stupid prizes” statement above.
Instead MTI’s liquidators are going to have net-winners file victim claims for the amount they invested, placing them into the same basket as genuine victims (those who didn’t withdraw more than they actually invested).
Where the bitcoin has been paid out to the investor and is no longer available as bitcoin, the liquidators are able to claim the monetary value at the time it was withdrawn or its value at the date the court orders the return of the property, whichever amount is the highest.
And for some reason this only applies to the last six months of Mirror Trading International’s operation.
The end-result is genuine victims having to share clawed back funds with net-winners, with genuine victims getting less overall.
It’s a bizarrely inefficient way of doing things. And, outside of liquidators paying themselves millions of dollars for the trouble, is likely to be extremely confusing for anyone else involved.
Personally I had to read MoneyWeb’s articles a few times before what was happening sunk in.
Anyway, while liquidators are hounding rank and file net-winners for a few thousand here and there, there’s been no movement on the millions Clynton and Cheri Marks stole.
Funny how that works.