By Jan Vermeulen
A hacker collective calling itself Anonymous ZA has released explosive details about Mirror Trading International (MTI), stating that at least R4 billion(US$2.39billion) in bitcoin has flowed through the scheme.
In response, MTI told MyBroadband the information stems from private member data that was illegally obtained and that it is “inaccurate at best”.
Mirror Trading International is a South African registered company offering Forex trading services by using an automated system to trade with the trading pool on behalf of its members.
Johann Steynberg is the CEO and founder of MTI, which focuses on Bitcoin trading and promising members a “truly passive income”.
According to MTI, it has over 90,000 active members in 177 countries, and its numbers are growing daily.
MTI made headlines recently after the Financial Sector Conduct Authority (FSCA) said it was investigating the company.
The FSCA said the current business model of MTI requires it to be in possession of a financial service provider licence.
“MTI has informed us that they accept clients’ funds in the form of Bitcoin, pool the funds into one trading account on a forex derivate trading platform, and conduct high-frequency trading through the utilisation of a bot,” the FSCA said.
If this is being done as described, then this amounts to financial services, hence the licence requirement.
However, the FSCA has a much greater concern about MTI’s activities.
The company claims to have more than R2.9 billion in clients’ funds in trading accounts, but the FSCA has not been able to conclusively confirm that the funds exist.
“Moreover, the returns on the investments claimed by MTI seems far-fetched and unrealistic,” the FSCA said.
At the time, MTI said that its bot-trading is able to generate consistent profits of an average of 10 per cent per month. More recently it said it has seen an average return of 0.5 per cent per day.
The FSCA recommended that MTI clients request refunds into their own accounts as soon as possible.
The Texas State Securities Board has also issued an emergency cease-and-desist order against MTI and accused it of perpetrating fraud through an illegal international multilevel marketing programme.
Canada’s Autorité des Marchés Financiers (AMF) has placed MTI on its list of illegal online platforms, issuing a warning that MTI illegally solicits investors.