South African victims of the Mirror Trading International (MTI) bitcoin scam are set to start receiving refunds from the liquidators.
According to local reports, the liquidators have indicated that they plan to start returning funds to victims as soon as they get a court ruling on how they need to handle claims. Some of the issues to be decided by the court including how to evaluate the refunds since victims invested in bitcoin whose value may have been different at the point of investment and when the scam imploded.
The liquidators nonetheless did not confirm reports that the victims would get between 50% to 60% of their investment back, indicating that the amount they would get back would depend on the eventual number of claimants that emerge.
The scheme, which was declared to be by far the biggest scan in 2020 globally, is thought to have received between 29,421 to 46,000 bitcoins, and is the biggest pyramid or ponzi-like scheme in South Africa’s history. Using the current bitcoin price of around R520,000, even the lower estimate values MTI at R15.3 billion ($784 million).
According to the liquidators, they have received a total of 7,903 claims thus far, and they anticipate that not all 15,000 investors will submit claims.
“Certain individuals use crypto as a money laundering channel or other dubious purposes,” the liquidators stated.
Some investors may have incurred losses of a relatively small magnitude, which they may not consider worth the effort to claim, while others may fall into the category of ‘net winners.’
“The expected dividend – previously estimated as between 50c ($0.084) to 60c ($0.10) in the Rand – changes all the time as more claims are received,” the liquidators said.
“There will be more than one dividend payments as we continue with collections from winners who must repay their winnings,” they continued.
Liquidators were able to recover 1,281 bitcoins that MTI’s former brokerage, FXChoice, had frozen which they immediately sold on the South African cryptocurrency exchange Luno, banking close to R1.1 billion ($56.3 million) for the estate.
MTI CEO, Johannes Steynberg, who went missing December 2020, was discovered by authorities in Sao Paulo Brazil in December 2021. In August 2023, he was found guilty in Brazil, where he is under preventative detention as extradition proceedings are ongoing, for forging identity documents.
Previously, a US court ordered Steynberg to pay over $1.7 billion in restitution to defrauded victims and an additional civil monetary penalty of over $1.7 billion, making this the highest civil monetary penalty ever ordered in any CFTC case.
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