Liquidators request greater powers in probing South Africa’s BTC Club

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Liquidators in South Africa are requesting more powers of investigation into a digital currency trading scheme which some have accused of lying, fraudulent and illegal behavior towards investors.

According to reports, four liquidators are appealing for greater powers of scrutiny into Mirror Trading International, after the firm was found wanting in an investigation by the South African Financial Services Conduct Authority in 2020.

The scheme had previously operated as a “crypto trading club,” promising investors a 10% return per month through a high-frequency bot trading strategy.

The liquidators involved in the case have now asked for greater powers to compel witnesses to trial, as well as to request financial information from banks and other institutions. They also want the authority to appoint additional liquidators, as well as the ability to operate across multiple different jurisdictions in investigating the scheme.

Mirror Trading International was forced into liquidation in December 2020, amid claims it was operating illegally and fraudulently. The firm’s CEO Johann Steynberg denied the claims, suggesting the firm was subject to “every single attack imaginable.”

Problems were first identified by regulators in the state of Texas last July, before being picked up by authorities in South Africa. Investigations found the firm had been operating without the required licenses, as well as misleading investors.

As well as the regulatory investigations into the firm, the matter has been referred to police, with a criminal case now running in parallel to the civil action against the company.

Investors are also thought to be preparing action, with the firm reported to be sitting on client digital currency assets worth $880 million.

The case is the latest example of a fraudulent digital currency scheme operating without a license. It is hoped the requested new powers will allow liquidators more tools to investigate the claims.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.