Mirror Trading International victims get offered payout

By | Criminal Law / Crime, Insolvency / Liquidation, News

Mirror Trading International’s liquidators have offered to demonstrate good faith to victims of the alleged pyramid scheme by paying a portion of their claims.

In exchange, those who want to take the deal must withdraw their opposition to the liquidators’ application to have the court declare Mirror Trading International (MTI) an unlawful scheme.

According to the court order, which MyBroadband has seen, the deal is conditional on the High Court finding that the business of MTI was conducted illegally.

Victims who have not opposed the application to declare MTI a pyramid scheme can also take up the deal.

The liquidators stated that this deal is available to all “true losers” of MTI — those who did not withdraw more than the rand value they put into the scheme.

This is an important detail, as MTI took deposits in bitcoin. However, the bitcoin value must be converted to rand using Luno’s exchange rate at the time of the deposit and withdrawal for the purposes of the deal.

Johann Steynberg

Johann Steynberg, Mirror Trading International CEO

Mirror Trading International was a network marketing scam that claimed to offer automated bitcoin-based trading services — initially in forex and later in cryptocurrency derivatives.

MTI made headlines in September 2020 after MyBroadband exposed the inner workings of the scheme, thanks to a data leak from a group calling itself Anonymous ZA.

The scheme collapsed at the end of 2020 after CEO and founder Johann Steynberg skipped the country, disappearing in Brazil.

Steynberg was arrested in Brazil a year after he disappeared, on 29 December 2021, after allegedly presenting fake identification to law enforcement officers.

Chainalysis named MTI the biggest cryptocurrency scam of 2020.

Johann Steynberg arrested in Brazil in December 2021

Court documents gave the last estimate of the funds that flowed through MTI as 29,421.03379 bitcoin — over R20 billion at current exchange rates.

However, a source with knowledge of the case told MyBroadband that the latest analysis shows that more than 46,000 bitcoin (R31.3 billion) flowed through the scheme.

With the help of the Financial Sector Conduct Authority, the liquidators managed to reclaim 1,281 bitcoin in early 2021 from Belize-based brokerage FXChoice.

They immediately sold the cryptocurrency and ended up getting a favourable rate, liquidating it for around R1.1 billion.

The same amount of bitcoin would fetch around R870 million at today’s exchange rates.

The deal — 20c in the rand

While the liquidators have yet to accept any victims’ claims at a creditors’ meeting, MyBroadband understands that there have been R355 million in claims previously submitted to the Master of the Court.

MyBroadband had heard from several people in court on Wednesday, when this deal was hatched, that the liquidators will pay the victims an initial dividend of 20c in the rand.

In a statement issued on Thursday, the liquidators said they made the deal with a group of net-losers and specifically a controversial group called GetaQuid, represented by JC Kriel.

GetaQuid says it represents 15,000 investors, according to the liquidators.

“The settlement with the groups of creditors is welcomed by the liquidators and seen as very constructive steps towards finalising one main area of the administration of the estate, namely the processing of claims of true losers, who are entitled to a dividend as soon as possible,” the liquidators stated.

MyBroadband spoke to GetaQuid’s legal representative Ruann Kruger and asked why the deal wasn’t for 100% of the claims.

Kruger explained that the liquidators would first verify claims against the MTI database in their possession.

Verified claims go to a provisional liquidation distribution account, after which they will receive an interim dividend, likely somewhere between 10% and 30% of the claimed amount.

“They don’t want to pay out too much to the first claims, and then there’s nothing left for claims that come in later,” Kruger said.

He said that the liquidators have committed to expediting claims as much as possible and will meet every few months to approve further payments.

MTI victims should be aware that GetaQuid charges a fee for its services and that it is not necessary to go through them to use this deal.

Kruger said it was not unusual for class action groups to ask members to contribute to help cover its expenses.

The liquidators said they would shortly upload a written consent which investors are encouraged to download, sign and submit together with their claim.

MTI pyramid scheme hearing delayed — again

The application to have MTI declared an unlawful scheme was postponed to 29 April 2022.

According to the liquidators, this was the fault of MTI 50% shareholder Clynton Marks.

They stated that Marks had inundated the court by filing voluminous papers during the week — and had done the same on several previous occasions.

It is interesting that the liquidators single out Marks, as they had responded to at least two thick stacks of papers in the past week — an affidavit from Henry Honiball, and a supplementary affidavit from Marks.

Both filings were well over 200 pages. Honiball also filed a supplementary affidavit of 87 pages.

“Mr Clynton Marks still opposes the application of the liquidators to declare MTI an unlawful scheme and alleges that he does so as the protector of creditors of the scheme,” the liquidators stated.

“This is, of course, false: he is one of the biggest winners in the scheme, and his agenda is simply to try and avoid a day of reckoning in terms of paying back and having to testify further.”

The liquidators said their Cape Town legal team worked non-stop to respond to his late and irregular filed papers. Some of this work lasted until the evening before court on Wednesday.

“The liquidators have no doubt that the agenda behind the late filings was simply to place the liquidators and the court in an impossible position to deal with all the papers in the short time available.”

Marks denied the accusations in a statement sent by his wife, Cheri.

“The statements by the liquidators are both untrue and defamatory, and we will not be commenting on this matter in the media,” they said.

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Mirror Trading International victims get offered payout (

MTI liquidators agree to process net losers ahead of winners

By | Criminal Law / Crime, Insolvency / Liquidation, News

Liquidators for the failed Bitcoin scheme Mirror Trading International (MTI) this week agreed to ring-fence and process the claims of net losers ahead of the net winners, some of whom are waging court battles to hold on to their winnings.

This follows a high court application brought by MTI investor Chris Kriel, representing 15 000 net losers in the scheme under an ‘MTI recovery group’ named Get a Quid, seeking to postpone scheduled inquiries into the scheme and to remove the liquidators on the grounds of irregular conduct.

Of the tens of thousands of claims submitted to the liquidators, only one has been accepted, that of JNX Online which is a company previously controlled by MTI founder Johann Steynberg and subsequently placed in liquidation.

Claims rejected

This created outrage among the many thousands of people who have submitted claims to the liquidators. At the second meeting of creditors in February 2022, the Master said the claims were rejected on the grounds that they were “illegible”.

Read: Creditors voice fury at MTI liquidators after all investor claims rejected

In an affidavit before the Cape High Court, MTI investor Johannes Kriel notes that the liquidator of JNX Online operates from the same office as MTI liquidator, Herman Bester.

“It is thus apparent that, on the face of it, something is amiss,” deposes Kriel.

“In other words, the Applicants (the MTI liquidators) are required to only follow the instructions of the single proved creditor in an estate which is indebted to hundreds of thousands of investors in many millions of rands (if not billions).”

The agreement between net losers and the liquidators outlines the process to be followed for claimants to verify and prove their claims.

Two groups

Ruann Kruger, the attorney representing Johannes Kriel and the net losers, says the claimants are now clearly split into two groups – the winners and losers – so that the payout of valid losers’ claims is not delayed by court cases being opposed by the big winners.

“We can assist the liquidators. We will now have access to the back office data, just as they do, so we can help in determining who were the losers and whether their claims are valid or not.

“We can also help with the winners, who will probably have to pay back into the scheme if they drew out more than they put in,” says Kruger.

“This of course is dependent on whether MTI is declared an unlawful scheme, and that case will be decided on 29 April.”

MTI drew in hundreds of thousands of investors from around the world on the promise of returns as high as 10% a month, but collapsed in December 2020 when Steynberg fled to Brazil and the company put a stop to all requests for withdrawals.

Read: MTI’s Johann Steynberg arrested in Brazil

Johann Steynberg, MTI, Mirror Trading International

MTI founder Johann Steynberg fled the country when the scheme collapsed. Image: Via Youtube

MTI was declared the world’s biggest crypto scam in 2020 by Chainalysis. By some accounts, more than 29 000 bitcoin passed through the system, representing about R20 billion at current bitcoin prices.

The liquidators are attempting to have MTI declared a Ponzi scheme, which would mean any proceeds derived from the scheme are unlawful and must be repaid. That case has now been postponed to April 29.

The liquidators say only 1 300 claims have been received, out of nearly 200 000 MTI members.

MTI solvent?

In a separate case before the Cape High Court, 50% MTI shareholder Clynton Marks argues that MTI cannot be deemed insolvent as it has recovered bitcoin worth roughly R1.3 billion and has claims totalling just R300 million. The old Companies Act and the Insolvency Act only allow for the winding up of a company unable to pay its debts.

Marks is opposing the application to declare MTI an unlawful scheme. In a circular to creditors, liquidator Riaan van Rooyen says Marks is one of the biggest winners in MTI “and his agenda is simply to try and avoid a day of reckoning in terms of paying back and having to testify further”.

“The settlement with the groups of creditors is welcomed by the liquidators and seen as very constructive steps towards finalising one main area of the administration of the estate, namely the processing of claims of true losers, who are entitled to a dividend as soon as possible,” adds van Rooyen.

Read: MTI liquidators chasing down an additional R2bn in ‘possible debtors’

“With the massive representation of Mr Kriel and the [Get a Quid] group, the liquidators are confident that the investors (creditors) will now realize that the liquidators continue to act in their best interest and the liquidators wish to extend their gratitude to the leaders of the groups, and their legal teams, for engaging the liquidators on this very important settlement affecting such a great part of creditors.”

Once the claims of the net losers have been validated and approved, the liquidators have agreed to convene a special meeting of creditors and prepare a first liquidation and distribution account detailing what dividends will be paid.

This agreement is conditional on the Cape High Court finding that the business of MTI was unlawful. All net losers are covered by the agreement, whether or not they are part of Get a Quid.

Article by Money liquidators agree to process net losers ahead of winners – Moneyweb

Author: Ciaran Ryan – Moneyweb

Mystery Africrypt investor wants Cajee charges dropped

By | Information Technology Law / Cyberlaw, Insolvency / Liquidation, News

A group of Africrypt investors, who lost millions following an alleged hack of the crypto platform earlier this year, say they will only accept an offer from a mystery investor to inject $5 million (R76 million) in the firm if the investor agrees to certain conditions.

This, despite investors with the majority of claims against the platform having voted unconditionally in favour of the offer, following a six-hour virtual meeting on Friday.

The mystery investor, who has not revealed identification details, has offered to put in the money for a 51% stake in the company and in so doing, take it out of liquidation, on condition that criminal charges against the platform’s founders Raees and Ameer Cajee are dropped.

The brothers have been in hiding since informing investors in April that the platform had been hacked.

The liquidators’ attorney, Ruann Kruger, confirmed in an e-mailed letter to creditors today that those investors representing 69% of the total ascertainable claims at the time voted in favour of the offer unconditionally.

However, creditors who made up 21% of claims voted in favour of the compromise subject to the implementation of additional terms and conditions that were put to the provisional liquidators during the meeting. The remaining 10% of the creditors rejected the offer.

To enable the provisional liquidators to properly verify each claim, creditors have been asked to provide full details and proof of each claim by Friday.

Attorney Darren Hanekom, who is representing a number of creditors, says the additional terms and conditions include that the settlement is no longer conditional on the investors withdrawing their criminal cases.

Hanekom says further protection mechanisms were also put in place regarding the mystery investor’s contractual obligations to the business.

“We await confirmation as to whether the amendment version has been accepted; thereafter, it will need to be made an order of court.”

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Cajee brothers to appear virtually at Africrypt inquiry

By | Articles, Business, Information Technology Law / Cyberlaw, News

Africrypt directors Ameer and Raees Cajee, who shut their crypto investment platform in April over an alleged hack, leaving investors millions of rands out of pocket, are to appear next month before an inquiry ordered by the company’s court-appointed liquidators.

The brothers went into hiding earlier this year after announcing the hack, saying they feared for their lives after receiving several death threats.

The liquidators’ legal representative, Ruann Kruger, told ITWeb yesterday that the Cajee brothers have agreed to testify on 19 and 20 October through a virtual session.

They were initially subpoenaed to appear before the inquiry last week, but this was postponed after their attorneys asked for an extension in order to consult further with their clients and stating at the time that their safety was still in question.

While a responding affidavit to oppose final liquidation of Africrypt, which was signed by Raees Cajee, contains the stamp of the South African embassy in Dar es Salaam, Tanzania, dated 19 July, no one knows – or will say – where the two brothers currently are.

Kruger said the first part of the inquiry, held last Thursday and Friday in Pretoria, heard testimony from Daniel Opperman, Africrypt’s former compliance officer.

Opperman, who was testifying over a virtual platform, told how a few days after the hack took place and two days before the two brothers announced in a statement that the company had been hacked, he met with the Cajees, but the brothers made no mention to him that the alleged hack had taken place.

“[Opperman] said he was very surprised to read about [the hack] in the media,” said Kruger. He added that Opperman will return to testify further at next month’s hearing. Contacted by ITWeb, to confirm the details of his testimony, Opperman declined to comment.

Kruger said the inquiry also heard testimony from Wayne Naidoo and Steve Miller, a director and manager, respectively, of public relations (PR) company Duke Advertising, which signed a 14-month contract worth R3 million with Africrypt.

The contract was to run until the end of December 2021; however, just three months into the contract, the PR company was paid the full amount. Kruger said the fact that the PR company was paid in full before the completion of the contract raised a red flag.

Raees Cajee contends in Africrypt’s affidavit opposing final liquidation that the application was taken out against the wrong company and that clients signed investment contracts not with Africrypt but with an entity called Rae Create Wealth.

However, Kruger said bank statements obtained by Tayfin Forensic Investigative Auditors, the forensic investigators appointed by the liquidators, revealed that all transactions made to Africrypt were moved to Raee Create Wealth. He said this and other evidence is expected to appear in the forensic report on Africrypt.

Contacted yesterday, Africrypt’s attorney Rashaad Moosa of Shaheed Dollie Incorporated Attorneys declined to comment, saying the inquiry is a private inquiry and that as such, he couldn’t comment without getting the permission of the commissioner. However, he said he would be questioning witnesses further in next month’s session.

Earlier this month, a group of investors’ bid to get the court to place Africrypt in final liquidation was postponed to 15 November.

It follows a provisional liquidation order brought by the group, under the name Badaspex, which was granted in April by the Gauteng South High Court against Africrypt.

Article by : Stephen Tim |