MTI victims getting screwed, SA authorities still doing nothing
And now, an update on Mirror Trading liquidation proceedings out of South Africa:
*checks notes*
- every MTI victim claim has been rejected
- the only claim approved was filed by JNX Online, a company belonging to MTI founder Johann Steynberg
- South African authorities continue to do nothing
The shitshow continues…
I’m not going to pretend to be an expert in South African law. I’m familiar with the US, where a Receiver/Trustee is appointed, scammers get steamrolled and victims with valid claims eventually get back what is recovered.
In place of that, South Africa has some convoluted liquidation setup. This process occurs independent of South African authorities.
As reported by MoneyWeb, the second meeting of Mirror Trade International creditors went down on February 4th.
The meeting concluded with
all investor claims being rejected on the grounds that they were ‘illegible’.
The only claim accepted by the Master of the Cape High Court, Zukile Mabusela, was from the trustee of JNX Online, a company set up by MTI founder Johann Steynberg and his wife Nerina.
JNX Online was used by Steynberg to buy and sell bitcoin (BTC) and to pay creditors and employees of MTI.
This suggests that, for $ome $trange rea$on, MTI employees are going to get paid before the Ponzi scheme’s victims.
For reference, here are MTI’s employees:
The problem is most, if not all, of MTI’s employees are also the scheme’s top earners. Or at the very least are related to them.
To that end, last November liquidators issued the following statement:
It is doubtful that any employee can still have a claim for arrear salaries against MTI.
But uh sure. Johan Steynberg’s company being the only valid claim doesn’t seem to concern anyone involved in making liquidation decisions.
One silver lining was that MTI’s top earner and suspected co-owner, Clynton Marks (right with fellow suspected co-owner and wife, Cheri Marks), had his personal claim rejected.
Clynton Marks, 50% shareholder in MTI and a creditor to the tune of R135.6 million in bitcoin loaned to MTI, likewise had his claim rejected.
His counsel, John Suttner SC, asked why the claim was rejected as it was not a claim for the return of an investment. It’s a clear liquidated claim, said Suttner.
The Master replied that the Marks claim was not substantiated.
I’m not surprised Marks wasn’t able to substantiate ownership of $8.9 million in stolen investor funds. Why the claim was entertained to begin with I have no idea.
As for MTI’s victims, getting screwed over elicited a pretty predictable response.
Creditors are reportedly angry that these resolutions grant the liquidators wide powers to hold inquiries and do whatever is necessary to chase down missing bitcoin, as they feel this is a blank cheque to run up costs at their expense.
Hendrik van Staden, representing 920 creditors to the value of R229.8 million, told the Master he was not satisfied that the claims had been rejected.
When Sybrand Tintinger, the lawyer representing the liquidators, attempted to call the meeting to a close, Chris Kriel, representing about 12 000 investors, expressed his frustration that the communication from the liquidators was null and void.
“You [the Master] said these liquidators need to set a threshold for a burden of proof for this liquidation.
“The liquidators are being obnoxious,” he said.
The liquidators had access to the back office computer systems so they were in a position to reconstruct who had invested bitcoin and how much, but this had not happened.
“To reject thousands of these claims on a technicality from the liquidators where they didn’t communicate that technicality to the investors is obnoxious.
I am going to publish this meeting across the world and tell the people how they are being treated by these liquidators,” said Kriel.
The rejection of claims prejudices investors by denying them the opportunity to vote on any resolutions that were tabled by the liquidators.
Again, I’m not familiar with SA law but it sounds like, liquidators set up claim criteria and didn’t tell anyone.
Then victims of MTI, acting in good faith and even with the assistance of attorneys, filed claims.
Liquidators then rejected every submitted claim, based on their secret criteria.
And this is all apparently legal and a normal part of South Africa’s post-scam liquidation process.
So what happens next?
Several creditors are reportedly about to take the liquidation on review for what they regard as multiple irregularities, such as the blanket rejection of claims, which denied creditors the right to vote on resolutions that allow the liquidators to run up costs at their expense.
A whole lot of nothing. Meanwhile MTI’s liquidators are sitting on over 8000 BTC. Today that’s worth $354.7 million.
We of course don’t know if they’ve actually recovered that amount, only that they know where it is. That was seven months ago…
Where are South Africa’s authorities in all of this?
They’re still not doing anything. The FSCA concluded its criminal investigation into Mirror Trading International in January 2021.
Eleven months after the investigation wrapped up there have been no further updates.
There was talk of a $6.9 million fine in July 2021 but uh, that’s gone nowhere. Maybe the FSCA filed the fine as a claim and also had it denied by liquidators.
Halfway across the world, Johann Steynberg (right) was arrested in Brazil last month.
There have been no further updates. We still don’t even know if Steynberg will be extradited to the US or South Africa.
Personally I think if Steynberg is to face justice, he’ll only get that if extradited to the US.
I feel if he’s extradited to South Africa, Steynberg will be released and somehow wind up with the bulk of seized funds.
The case will continue to go nowhere. Victims will be expected to just forget about their losses and move on.
The real tragedy of the MTI scandal was recorded in the comments section to the side of the Zoom meeting.
“What happened to the 8 000 BTC the liquidators said they found?” asked one commentator
“If the liquidators have done nothing in this past year, we can assume they will not be drawing any fees from the members,” said another.
“What about the thousands of people whose lives have been absolutely devastated?” wrote another.
“People committing suicide, people living in garages.”
Hopefully the next MTI liquidation update isn’t anytime soon. This is too depressing to report on.
Update 16th February 2022 – Some good news, some bad news.
A circular published by MTI’s liquidators provides further insight into liquidation proceedings and what comes next.
Shoutout to Zeek Rewards victims complaining about only getting 81%+ of their losses back.
Did the liquidators get 8k back? Only aware of the initial fxchoice bounty and the 8k that was “traced” but not recovered
Everybody have to be very careful of investing money to any other business without proper investigating. Do not caught to scam again.
Thanks
Deepal
Ah yeah it’s only tracked. Liquidators haven’t since confirmed whether they’ve seized it or not because of course they haven’t.
Will update with that clarification, thanks. Everything about this process is terrible.
Ah okay! Thought I missed something
One of the Telegram groups posted a translated radio interview with one of the liquidators which seems to clarify much of the current legal quandary,i’ll send you a link in Contact form
Oh please god no… if it’s more depressing. No God no no no no no! /meme.
Haha,no,but i’ve been told many of the claims are absolutely illegible,let alone useable by the court. Master of the court rejected the claims
A-ha! It needs Telegram to work. I don’t use TG on the work PC.
NOT THIS TIME MWUAHAHAHAHAH!
I believe that. We get the same thing in the US cases and then the inevitable crying.
“I gave some guy I just met 5 minutes ago $50,000 and all he gave me was some scribble on a napkin, what do you mean you want actual proof?!” etc.
But MTI liquidators rejecting all of the claims? Like thousands of them? Looks incredibly suss.
Court rejected, I assume it’s a case of the court is not in the mood to sift through the stuff and rejected so the liquidators have to manually verify claims instead.
GetAChump posted the meeting
youtube.com/watch?v=x1Le1E75hQ0
If you want a giggle you can listen to Chris Kriel having an absolute fit, and you can see the kind of nonsense people are complaining about while the judge basically said “Shut up, sit down, i’m in charge here”.
Hundreds of claims written by people who can use the internet and are assisted by a well-respected attorney are somehow all illegible… Yeah, right
Also note, the salaries that Steynberg paid was done so via Coin Buyers Club….this company belongs to Cheri Marks and Andrew Caw
Are we sure MoneyWeb meant “illegible” and not “ineligible”?
@ Malthusian
It’s a direct quote. Ask them. The majority of the claims would have been made by Afrikaans speakers, probably in Afrikaans, a lot of of the perps are Afrikaans, as are the lawyers, that sounds like too much of a basic error as the two terms in Afrikaans are hard to confuse.
TL-DR: No. Something else is going on here
Ryk van Niekerk from RSG Moneyweb did an interview with Mr Herman Bester from Tygerberg Trustees one of the appointed liquidators in Mirror Trading International.
Ryk: Do you have a clear indication on how many investors were involved in MTI and the amount of money invested in MTI and how much money is lost.
Herman: MTI is most probably one of the biggest estates in the history of South Africa.
There were more than 300 000 MTI accounts. About 50 000 dormant accounts. Further 52 000 duplicate accounts (where the same member opened multiple accounts)
196 000 included in the investors book of MTI.
A calculation of 39 000 BTC deposits.
On the date of liquidation theoretically there should have been 10 000 BTC left in the company. If the case if MTI was a legal company and traded in normal business practices; there should have been 22 000 BTC in the company.
The difference between the 10 000BTC and the 22 000BTC is the difference between a legal and an illegal scheme.
Ryk: Investors lost money and tried to submit claims, but the claims was rejected. What is the current situation?
Herman: The situation is very simple. Approximately 2000 claims were submitted at the Master in Cape Town.
It is a challenging and almost impossible task for the Master make a decision based on the face value of the claims.
Due to the complexity of the claims, were the claims rejected. The fact that the claims were rejected seems as a negative result for the creditors- which is in reality not the situation.
The fact that the claims were rejected, gives the liquidators the chance to review and compare the claims against the records of the company and to approve the claims.
The process also makes provision for the members whose claims are not accepted to re-submit a claim. It’s important to know it was the Master who rejected the claims. Not the liquidators.
The liquidators that was part of the meeting of creditors doesn’t have a say over the discretion of the Master.
The liquidators knows that these claims can now be proven without having to be re-submitted.
Ryk: So the Master rejected the claims and now the liquidators can approve the claims if the liquidators finds that the claims has merits?
Herman: In terms of Secion 78(3) of the Insolvency Act the liquidators after the second meeting of creditors now have the powers in case the powers (resolutions) are accepted at the meeting. The liquidators are allowed to consider, investigate and to accept the claims. This is the powers the Insolvency Act prescribe.
Ryk: The liquidators now potentially have the scenario where you need to verify about 200 000 claims?
Herman: yes, at this stage the liquidators received 6 000 claims.
4000 of the claims still needs to be proved or submitted at a meeting of creditors.
2000 claims to verify is from a practical point of view not a problem.
Ryk: obviously there were criminality also involved in MTI since there are a lot of money missing. How does the impact of criminal charges affect the creditors claims?
Herman: The liquidators is not directly involved in the criminal cases.
Cases are investigated and charges are laid at the NPA and it is their responsibility to take action. The National Prosecuting Authority is also involved in the case against Mr Johann Steynberg.
Ryk: a lot of individuals made money from this scheme and cashed out soon enough and made massive profits. The profits made were the yield of crime. Are the liquidators going to try and recoup the profits?
Herman: We brought an application to the High Court which is a public document and in terms of the application the liquidators asked for the scheme to be declared as an Illegal business.
The reason for this is that the handling of the funds that needs to be paid back to the scheme by the liquidators is a cleaner and simpler process.
The liquidators will then take steps against the winners who made money to the detriment of the losers’ deposits.
Ryk: Adv van Staden mentioned that one claim that was accepted from JNX Online (the Company of Johann and Nerina Steynberg). What does it entail?
Herman: The company JNX Online who submitted the claim against MTI is a liquidated company.
The company was initially used to fund MTI before MTI had it’s own bank account.
In the court documents it can be seen that the company JNX Online funded transactions on behalf of MTI.
Please note I am not a professional translator and I do apologize for the grammar mistakes and typos
I think the lack of understanding of the liquidation process is the main reasons people are getting upset. Again the members who lost the most is listening to the stories their uplines are telling them.
The narrative that is driven that the JNX claim will land in the pockets of the Steynberg’s is wrong.
The honorable Advocate Hendrik van Kakpraten even got the liquidator appointed in JNX wrong.
Perhaps Moneyweb can learn to do their own due diligence and verify their facts before writing articles based on the assumptions made by Chris Kriel who is representing both the winners and the losers.
And by means of assistance I am referring to Chris Kriel driving the narrative that is prescribed by the winners.
Advising MTI creditors not to claim. Did Chris Kriel and Honiball submit their claim? Or is Honiball even allowed to claim with his more than a thousand downline?
What about Advocate Hendrik who is working closely with Henry Selzer- Cheri and Clynton’s lawyer. You must be blind if you can’t see what’s going on.
It’s the same storyline in every Ponzi, the winners appoints lawyers to try and get away with all the money they stole from innocent victims.
What about the false narrative that’s been driven by Getaquid who is claiming to assist MTI members. The only thing they are doing is to make the victims even more depressed.
They will have even more blood on their hands for spreading their own propaganda to fund their next scam.
How is this even a thing? Are the Judges overseeing this braindead?
WTF am I watching?
There seems to be a Judge and he has no idea who’s there. So we have randoms announcing themselves as attorneys representing arbitrary numbers of clients.
I’m about 5 mins in (Clynton’s attorney just announced himself). How can you have meaningful hearings when they’re being run like a kangaroo court?
How come the parties haven’t filed appearances, why isn’t there a clear briefed agenda… what am I watching?!
No wonder the whole thing comes across as a mess. That’s exactly what this is.
I’ll try to get through the rest of it but OMG. You cannot sort out MLM Ponzi schemes that grew to $100s of millions in this haphazard manner.
Alright so I’m 20 minutes in now. Feels like a dozen random attorneys introduced themselves. Then the Master Liquidator rambled on for a bit…
Now Clynton Marks’ attorney has been talking for ~2 mins but has audio problems. And so it’s just been the Master Liquidator asking if anyone can hear him while everyone else watches on awkwardly.
I feel dumber the longer I watch this…
edit: Nope, not Marks’ attorney. That’s who the Master guy was asking for but this is some other random claim guy.
edit: I’m getting confused, it’s Steynberg’s attorney (JNX). Now some other guy has cut him off to object about every other claim being illegible.
Fuck me. Steynberg’s attorney basically told the Master Liquidator to reject every victim claim because no proof of money being deposited into MTI was provided.
I might be misunderstanding but he seems to be wanting everything but Steynberg’s claim rejected because bitcoin isn’t money, so no proof investors invested anything into MTI. Check mate victims.
Now Marks’ attorney basically just told Steynberg’s attorney to STFU. Because only the Master can object to claims.
Why does nobody seem to know how this hearing is supposed to proceed? The roles seem very opaque.
This Hendrick guy seems to be the only one who gets what this process is supposed to be about (returning money scammers stole to MTI’s victims).
Why isn’t he the Master Liquidator?
Haha. Clynton Marks’ claim was rejected because he just submitted a “Trust me bro” affidavit.
This Chris bloke isn’t happy. Poor guy has to school the dumbasses on how to do their jobs.
Hendrick and Chris appointed joint Master Liquidator FTW!
He is a liquidator, the master is a court adjudicator not q liquidator.
Chris has no idea how anything works.
Ah OK. I thought he was the Master Liquidator. So he’s just a representative of the court?
I don’t know the guy but he summed up proceedings going nowhere. Also liquidators not using MTI backoffice data to verify claims.
In the US the Receiver/Trustee hires a forensic team to sort out the data. Then that is used to verify claims, which are submitted through a claims portal so there’s no confusion over what is needed.
People still of course file unsupported claims, but they are rejected without issue. Here it seems nobody knows what is required and whether a claim is acknowledged by the liquidators is arbitrary.
Ah so Chris is behind a claims company representing overseas investors.
Alright so that’s that. Angry investors, frustrated claim coordinators and liquidators on the defense.
I guess wait till the next meeting and see if any progress is made.
1. Adv. Hendrik van Staden is not an advocate. In fact he doesn’t really have any liquidation or Insolvency background.
2. Johann Steynberg’s attorney/lawyer was not present at the meeting. Schabort represented the liquidated company of the Steynberg’s- JNX Online.
3. For example, Advocate Hendrik van Staden made some general statements, but he did not disclose to the Master that three letters to his attorneys were simply left unanswered in so far as pertinent queries were raised concerning who he and his attorneys represent and whether the attorneys have mandates from individual creditors.
Conspicuously, these issues remain unanswered to date hereof. For the benefit of all creditors, the letters are attached hereto.
The very first letter clearly set out the duties of attorneys and advocates and the views of the Supreme Court of Appeal concerning representatives acting for groups with members having conflicting interests.
The very purpose of this query was that the liquidators wanted 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.
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. They should challenge their legal representatives to also do so, since this is the very least they can do and their legal representatives are obliged to disclose same to them, even without a request.
Another participant at the meeting, Mr Chris Kriel claimed to represent 12,000 investors, but he has not provided the liquidators with any authority to speak on behalf of this unknown group and, again, the liquidators are to guess who he represents.
Mr Kriel was equally placed on terms by the liquidators to explain how he came into possession of sensitive privileged communications between the liquidators and their attorneys and placed on terms to remove such communications from his website.
The written demand is attached and was not responded to at all. It was recorded in the demand, that Mr Kriel is undermining the liquidators in the execution of their duties.
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.
The liquidators keep on encouraging investors to lodge their claims with the estate and again herewith affirm that all claims will be scrutinized and accepted in the estate according to the directions obtained in terms of the mentioned High Court application.
Creditors who have already lodged their claims will not have to lodge their claims again: the liquidators will work on the claims already lodged and, if satisfied, accept the claims in accordance with the court order.
If the liquidators require clarification on certain claims, a creditor will be engaged to first supply it in order to attempt to settle the amount of the claim, whereafter the claim will be proved on the basis of the settlement.
If a settlement cannot be reached, an investor is entitled to re-lodge his claim, if so advised, to tender same for prove at a special meeting of creditors, or to take legal action in order to enforce the claim.
It is not the liquidators who reject claims. The Master presiding at the meeting of creditors does so.
The record will show that the liquidators had no say at the second meeting of creditors on any of the claims.
There should be no doubt that it is in the best interest of the net loser investors, if the court declares the scheme unlawful.
That will enable the liquidators to swiftly and with substantially less legal costs, recover the ill-gotten gains from net winner investors.
Adv Hendrik van Staden is on record to convey to his clients that having the scheme declared unlawful, will have the effect that all investors lose their claims against MTI and that the assets of MTI, can then be forfeited to the State.
This statement is completely wrong and disingenuous. The legal position in these circumstances is trite.
Once a liquidation application is in place, the liquidation process trumps the asset forfeiture process. It is irresponsible and shockingly inaccurate statements like this, that cause investors to unfairly question the motives and integrity of the liquidators.
ACCESS TO THE BACK OFFICE
All MTI members were notified at the beginning of December on where they can get access to their back office data to submit claims.
I guess it won’t be easy to access your data if you had multiple accounts and fake pseudonym accounts and you can’t remember all the fake accounts you used.
It was Chris Kriel and his group who advised members not to obtain info from the back office data. Why?
You should rather ask why would they advise member not to obtain their data? I guess then the new Getaquid scam becomes redundant.
Chris Kriel is bargaining on his new Getaquid income stream. SCAM RECOVERY! Why would you want to ask members a monthly fee when they have already lost their funds?
Why is Chris Kriel’s recovery scam based on the amount of funds you lost?
All concurrent creditors are treated the same. How will Getaquid offer the creditors a better service- also note that a letter has been sent to Chris Kriel where he failed to remove content from his website and a interdictory relief will be seeked against Kriel and Getaquid.
JNX Online is owned by Steynberg. A company can’t appoint its own attorney so why pretend he’s not Steynberg’s lawyer?
Having watched the meeting, I literally saw the guy reject everyone’s claim except Johan Steynberg’s.
So why didn’t that happen first before liquidators were appointed and this mess was created?
I’m not having a go at you and appreciate your input. You sound like you know what’s going on and the explanations are interesting to read.
I still maintain this is a horribly convoluted system. I don’t know how SA’s liquidation process fares in other instances, but it’s clearly ill-equipped to deal with multi-million dollar MLM Ponzi schemes with thousands of victims scattered across the globe.
You need a central body between the courts and victims. That body marshalls assets and evaluates claims.
This 69 liquidators working on top of 400 lawyers representing who knows who, with a court representative making sweeping judgements at the top is ridiculous.
Probably, but that’s the hand the “investors” chose when donating to known scammers in South Africa after numerous warnings and “bUt CrYpTo Is UnReGuLaTeD”.
This is pretty groundbreaking stuff, the standard modus operandi has come up seemingly short so far – still the best option they have compared to things like Sharemax (not a MLM, but pretty much a Ponzi) where the ponzi boss got put in charge of “rescuing” the business, and 10 years later that rescue is insolvent and hasn’t paid much of anything.
moneyweb.co.za/moneyweb-opinion/sharemax-investors-screwed-twice/
This I wholly agree with but it’s a separate issue.
I’ll routinely just answer “sorry for your loss” when we get people who invested in some scam back in 1987 and come on here going “wHeRe’S mY mOnEy?”
Just a few weeks ago I had someone email in asking about filing a Zeek claim. I’m like mate that was back in 2012, what is wrong with you?
I’m not advocating on behalf of MTI victims, that’s beyond what I do here and I don’t have any interest there. But trying to cover these proceedings does my head in.
I don’t know the legal specifics of it but I can see this happening if Steynberg is extradited to SA. Or some bullshit that sees the Marks put in charge of proceedings.
JNX Online has it’s own appointed liquidators. So the attorney was appointed by the liquidators. Not an appointment made by the Steynberg’s.
In similar cases it is usually the case where funds were moved from different companies and directly.
So for example: MTI funds going to JNX Online -> the Steynberg’s -> back into MTI.
The only reason why the JNX claim was so easily accepted was the claim was in ZAR. There was no BTC transactions involved and it was easy to verify the claim.
From the most recent letter from the liquidators they mentioned that they will approach the court to get clarification on how the claims will be dealt with.
Because BTC was involved you need to take the following in consideration:
What will the value of the claims be?
Is it correct to use the value of BTC on date of liquidation?
Will the value be the average for the day?
The value at date or time of liquidation?
Then the Debtors who need to pay back? On what value do they need to return their ill-gotten gains? Most probably be the same basis as how the claims are handled.
Furthermore, I personally has seen one of the claims submitted and it is really difficult to see the amounts on the claim. Screenshots are taken from the back office and the original font is grey. As soon as you scan the documents, it becomes illegible.
From the Resolutions accepted the claims will be streamlined.
All the latest updates and documents including the Resolutions accepted is on the Tygerberg Trustees website (one of the appointed liquidators) Think you might find it interesting to read.
Still awaiting for a resolution according to the country law.
Deepal
Who appointed those liquidators?
Standard practice in the US is liquidate any cryptocurrency at time of seizure.
Claims are based on USD equivalent invested at the time of investment.
Want to cry about what your imaginary BTC is worth now? Too bad.
Distribute liquidated proceeds across valid claims. This can be done over multiple payments if liquidation of other assets/clawback litigation is going on.
Net-winners have to pay back whatever was paid to them. Receivers typically employ forensic accountants to calculate this.
You pay back back whatever you stole in BTC based on what that BTC was worth in USD at the time each payout was made.
If you can’t pay or don’t want to, you get sued and that typically proceeds to settlement.
I can’t remember the last time I saw an analogue claims portal. Everything is set up and stored electronically.
You can send in written documentation, which is scanned by the Receivership. Anything non legible is your problem.
I understand some claims are going to be rejected based on lack of proof/documentation. Maybe even a large percentage (play stupid BTC Ponzi games and this is what happens).
But every claim?
You’re telling me a year in and not one MTI investor has filed a valid claim? Not buying it.