Mirror Trading International (MTI) issued a ‘critical statement’ on Tuesday saying that its lost CEO Johann Steynberg is probably alive and in Brazil, but that “managers and leaders don’t know if our bitcoin is safe”.
This statement comes just days after Ulrich Roux & Associates withdrew as the firm’s legal representatives, citing Steynberg’s disappearance and the fact that MTI members do not accept withdrawal as they did in the past .
The law firm confirmed that MTI management has “no way to contact Steynberg”.
MTI is reported to have 280 000 members worldwide, allegedly generating earnings of up to 10% per month using a computerized trading algorithm. The Financial Sector Conduct Authority (FSCA) has warned people to stay clear of the company and these claims of high earnings.
The statement issued by MTI says that the last time management heard from Steynberg was December 15. The same statement quotes Steynberg’s wife, Nerina, as saying that he was going back to SA on December 22, although MTI managers have no knowledge of this.
The following extract is taken from the MTI statement:
- Johann has not been truthful with management, leaders or members.
- We as managers and leaders do not know if our bitcoin is secure.
- Managers have contacted the administrator team; they cooperate fully.
- Management has been in contact with the broker, Trade300, but they now believe this company may be owned and operated by Johann Steynberg. Communication with the broker has been sparse and imminent.
- The entire management team cooperates with law enforcement and will continue to do so until this issue is resolved.
- Nerina Steynberg (Johann’s wife) has not yet filed a missing persons report.
The MTI statement goes on to say that things began to unravel quickly after the search and seizure raid by the FSCA in October, when offices and homes of MTI executives were raided and several phones and electronic devices were seized.
Read: MTI plans FSCA post-raid on execution offices and homes (Oct 28)
This created additional work, which required the employment of 22 more technical staff from MTI.
“The system continued to break down and Johann told us that we had several hacking attempts by a Russian syndicate. He sent us details of these, some very high ransoms.
‘Accounts can be compromised’
“On the day of the raid an independent contractor for MTI, a crypto expert, was contacted and asked to contact Camila (the senior account manager) at Trade300 [MTI’s unregulated broker] and tell her that our accounts may be compromised as a result of the raid and she must wait to hear from Johann before allowing any access to the MTI broker account, which the contractor did immediately.
“The contractor had Trade300 contact details as we asked him to help Johann test the MTI bitcoin balance to the FSCA and the public cryptographically. However, Johann did not provide him with the necessary details to complete this process. “
After the confiscation of personal devices and companies by the FSCA, Steynberg informed management that a security protocol had been put in place with the broker to avoid members’ bitcoin theft. This included imposing a restriction on withdrawals.
The managers own Bitcoin to use
A week after the raid, Steynberg apparently asked his MTI co-executive Clynton Marks to send 400 of his own bitcoin (worth about R137.8 million), which he would probably get was matched to 400 by Steynberg, so that backlog removal requests could be processed.
“Management has no proof that Johann contributed the amount he indicated. Clynton Marks had full confidence that it would get its bitcoin back, ”according to the MTI statement.
On Monday November 30, Steynberg received an anonymous warning of an imminent raid from the FSCA, and decided he needed to “reassure himself”.
On December 2, the management team discovered that Johann was on his way to the airport, and they were reassured that everything would be okay and that he needed to put measures in place as if anything was happening to him, his wife Nerina could run the company. Apparently he flew through Doha to São Paulo in Brazil.
“For the weeks from December 3rd to December 14th Johann and Nerina continued to manage and run the MTI technical department despite the challenges we faced: slow withdrawals, server side reporting problems, server that needed upgrading and better protection, ”said MTI.
On December 12, Clynton Marks became concerned about the lack of contact with Steynberg when he failed to log in to the company’s computer system as expected.
The following day the managers of MTI told Johann that they would no longer refuse to work with him unless he appointed a very careful second who could run things in his absence. Steynberg wanted his wife to be that individual, but eventually agreed to appoint an outside contractor.
Later, Marks was emailed instructions on how to run the company.
The MTI server team, unaware of the change in corporate reporting arrangements, was hesitant to accept orders from anyone other than Steynberg as he had been specifically instructed to deal only with him.
It then came to management’s attention that no server upgrade had been done as Steynberg previously noted.
Bitcoin needed to honor an imminent withdrawal
“So far at the time of writing this statement the bitcoin requested to honor withdrawals has not been paid out of Trade300 and there is no valid reason for this.
“Over 34 emails have been sent to Trade300 in the last 6 days to resolve this issue,” said the MTI statement.
“Nerina [Steynberg] told us not to tell members about Johann missing, and that she was sure it would come up. ”
Nerina was instructed to open a missing person case, but has failed to do so, according to the release.
On December 16, MTI paid a private investigator to find Johann. “Nerina wasn’t happy about that. The researcher interviewed Nerina, refused to be recorded and was not forthcoming with information.
“The Nedbank MTI account, to which only Nerina and Johann have full access, has been suspended,” according to the statement.
“Our head of corporate services was locked out of the account and the login has been changed.
“Nerina only informed us today [the statement is dated Tuesday, December 22] that Johann had booked a return flight and that his return date was the 22nd from December 2020.
“This was news to us; not once in the last week or after he left have we ever been communicated with. We are convinced that it has control over its funds and promised the management team and leaders that it could run MTI in Johann’s absence. “
FSCA theory correct?
FSCA’s head of enforcement, Brandon Topham, says he is aware of the community from MTI management, and seems to confirm the FSCA’s hypothesis that Steynberg operates the company’s engine without allowing its lieutenants to enter its in-house operations .
There are still confusing messages coming out about MTI and the security of the 17 000 bitcoin (worth about R5.6 billion) reported under its control.
A Telegram message sent to Moneyweb says that management now has control over the server and that the trading platform has confirmed the balance, but members will have to wait until Monday to confirm that bitcoin is secure.