South Africa’s financial regulator, the Financial Sector Conduct Authority (FSCA), has filed criminal charges with local law enforcement against Mirror Trading International (MTI), the alleged online bitcoin trading scam. The regulator says its decision to press charges follows an investigation into MTI that revealed the company’s use of fake trade statements, undeclared losses, and possible fraud involving thousands of bitcoins.
False Trading Statements
The ongoing probe’s preliminary findings seem to contradict claims by MTI executives that their company’s trading bot has “returned 10% a month on average, and that MTI has never had a negative profit trading day, with one exception. . ” The findings also seem to contradict past denials by MTI CEO Johann Steynberg, who was slapped with an expiration order and abstention by US regulators, that his organization was conducting a scam campaign.
According to a statement issued on December.17, the FSCA accuses MTI executives of repeatedly using “trading statements based on demo trading accounts and not actual trades.” The practice, supposedly intended to reassure investors of MTI’s profitability, was revealed by FX Choice, an Belize-registered online trading platform.
As reported by news.Bitcoin.com, FX Choice blocked MTI accounts after discovering that the latter was running a multi-level marketing scam. Meanwhile, as part of its investigation, the FSCA says it reached out and received evidence from FX Choice that proves that MTI was actively involved in an attempt to mislead its investors.
After its relationship with FX Choice ended, MTI began dealing with another online trading platform, Trade 300. Interestingly, the FSCA says it found evidence on a desktop seized during a raid on a residence one of MTI’s executive officers suggesting that Steynberg manages Trade 300.
The Missing Bitcoins
Meanwhile, the FSCA suggests freezing an MTI account with FX Choice has opened up a can of worms. According to the regulator, investigations show that “the total (number of) crypto assets frozen on FX Choice is a negligible amount” compared with “the total number of assets that MTI claimed to invest on behalf of its clients.” The FSCA explains this anomaly as follows:
FX Choice confirmed that MTI entered 1846.72 bitcoin between 29 January 2020 and 3 June 2020 and made a loss of 566.68 bitcoin, a roughly 30% capital loss.
Yet, when it received its results with FX Choice, MTI claimed that it “transferred 16,444 bitcoin from FX Choice to Trade 300 in 4 installments on 21 July 2020; 22 July 2020 and 24 July 2020 respectively. ”
Meanwhile, after conducting its own investigation, the FSCA says it has found no evidence to support MTI’s assertion that it transferred the 16,444 BTC. The regulator explains:
The FSCA found that MTI of Fcoin Choice did not occur from FX Choice in July 2020. MTI was last conducted from FX Choice in August 2019. Further, FX Choice confirmed that none of the eight dispatch wallets are related to FX Choice did not and FX Choice had not received deposits or sent any payments to any of the eight bitcoin wallets. ”
Perhaps in a sign that the MTI bitcoin scam is starting to unravel, the regulator discloses that it has been receiving “complaints that investors were unable to repay their investments.” On social media, which Steynberg and his associates used extensively to disprove scam allegations, concerned investors are complaining about “delayed” withdrawals.
What are your thoughts on the FSCA probe findings? Tell us what you think in the comments section below.
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