South African authorities have recovered approximately 1200 Bitcoin (BTC) from an account held at FXChoice, a broker previously associated with the collapsed Mirror Trading International (MTI) scheme. The funds, valued at roughly $70 million at current market rates, were transferred to MTI's court-appointed liquidators following approval from the Financial Sector Conduct Authority (FSCA).
Mirror Trading International, once promoted as a high-yield passive investment opportunity, promised daily returns through an artificial intelligence-driven trading bot. The company collapsed in December 2020, revealing itself as a large-scale Ponzi scheme. Founder Johan Steynberg disappeared, leaving an estimated 230,000 investors worldwide facing substantial losses. The FSCA had declared MTI an illegal scheme and warned the public about its operations in August 2020, shortly before the company's eventual unraveling.
FXChoice, a Belize-based brokerage, had served as a supposed trading partner for MTI. But the relationship ended abruptly in August 2020 when FXChoice terminated MTI's accounts. The broker revealed that MTI engaged in minimal actual trading, directly contradicting the company's public claims of generating significant profits for investors. Instead, FXChoice's systems showed MTI primarily used its accounts as a holding facility for investor funds, specifically Bitcoin deposits.
When FXChoice severed ties with MTI in August 2020, it also froze the Bitcoin held within MTI's accounts. This action secured approximately 1200 BTC, which had been transferred into those accounts in June 2020, just two months prior to the public split. In the wake of MTI's collapse and the subsequent civil liquidation proceedings in South Africa, the FSCA authorized the release of these frozen funds.
FXChoice confirmed the transfer to MTI's appointed liquidators. Jan Vereulen, reporting for MyBroadband, cited a statement from FXChoice: "The FSCA have authorised the dispersal of MTI's frozen funds at FXChoice to the appointed liquidators. We confirm that the transfer has now been completed and we consider the matter closed."
FXChoice previously indicated that Johan Steynberg, MTI's founder, initially opened the accounts. These accounts later transitioned to a "corporate status." This detail narrows the individuals responsible for moving the Bitcoin into FXChoice's custody to either Steynberg himself or Clynton Marks, a key figure in MTI's leadership.
The value of the recovered Bitcoin has seen significant appreciation since MTI's collapse. In August 2020, 1200 BTC was worth between $12 million and $14.5 million. By the time of the recovery, its value had soared to approximately $70 million. This fluctuation poses a challenge for the liquidators regarding victim compensation. Decisions must address whether investors are reimbursed based on the USD value of their initial deposits, the BTC amount they invested, or the current market value of the recovered assets.
Progress in prosecuting those behind MTI remains stalled despite the recovery of assets. Johan Steynberg vanished following the scheme's collapse and his current whereabouts are unknown. Similarly, Cheri and Clynton Marks, also implicated in the MTI fraud, reportedly continue to reside in South Africa. South African authorities conducted raids on MTI's offices and the Marks' residence, presumably collecting evidence. However, no criminal charges have been publicly filed against the Marks concerning MTI. Their involvement in cryptocurrency fraud in South Africa extends to the earlier BTC Global scheme, which prompted a criminal investigation as early as March 2018. That investigation remains open, with no public action against the Marks in that case either.
As of now, MTI's liquidators have not publicly announced their methodology for distributing these recovered funds to victims.