South African authorities appear to be paying closer attention to the cryptocurrency space in 2021 in the wake of a major Bitcoin (BTC) Ponzi scheme and increased trading activity.
It has been reported that the South African Financial Sector Conduct Authority has called for tighter controls of the crypto space after the collapse of what has been described as the biggest Ponzi scheme the country has ever seen.
However, in December 2020, Mirror Trading International went into provisional liquidation after one of its directors allegedly skipped the country, taking with him access to a copious amount of Bitcoin that investors had entrusted to the company over the past few years. In January 2021, MTI claimed to have over 260,000 members around the world and had amassed 23,000 BTC of investor’s holdings, which is worth over $1 billion in today’s market.
The report said that the South African arm of the business purported to conduct high-frequency derivatives trades using bots, but investors were left empty-handed at the end of 2020 when CEO Johan Steynberg fled the country.
The firm’s other directors claim that Steynberg was the only one with direct control of MTI’s entire Bitcoin holdings and believe the CEO has fled to Brazil.
South African regulators and tax authorities are honing in on crypto in 2021 amid booming markets and a failed Ponzi scheme https://t.co/Ld3G0lFQMx — Cointelegraph (@Cointelegraph) February 9, 2021
Likewise, the FSCA warned investors in South Africa against investing in MTI in August last year after ascertaining that the company had been operating without a financial service provider license.
Brandon Topham, the Divisional Executive of Enforcement at the FSCA in South Africa, said that how the FSCA is involved in the MTI investigation.
Thus, he added:
“The importance of MTI is that they first used the crypto as a basis to argue that the alleged investment business being conducted by them did not fall into our jurisdiction as the payment method was crypto. Later, when they stopped trading forex due to our investigation, they alleged to be trading crypto, and as crypto had a reputation for large returns, this made it easier for victims to believe the high returns were real.”
Source: Cointelegraph