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South African Regulator’s Probe Into Mirror Buying and selling Worldwide Finds Beforehand Undeclared Losses and Lacking Bitcoins

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The South African financial regulator, the Financial Sector Conduct Authority (FSCA), has filed criminal charges against Mirror Trading International (MTI), the alleged online fraud in Bitcoin trading, with local law enforcement agencies. The regulator says its decision to file charges stemmed from an investigation by MTI that uncovered the company’s use of fake commercial statements, undeclared losses and possible fraud involving thousands of bitcoins.

False trade claims

The preliminary results of the ongoing investigation appear to contradict claims made by MTI executives that their company’s trading bot “has an average return of 10% per month and, with one exception, MTI never had a negative profit trading day”. The results also appear to contradict the earlier refusals of MTI CEO Johann Steynberg, who was beaten by US regulators with an injunction that his organization was conducting a fraud operation.

According to a statement released on Dec. 17, the FSCA accused MTI executives of repeatedly “using trading statements based on demo trading accounts rather than actual deals.” The practice, which appears to convince investors of MTI’s profitability, was exposed by FX Choice, a Belize-registered online trading platform.

As reported by news.Bitcoin.com, FX Choice blocked MTI accounts after the latter was found to be carrying out a tiered marketing scam. Meanwhile, as part of its investigation, the FSCA said it had received evidence from FX Choice showing that MTI was actively trying to mislead its investors.

After the relationship with FX Choice ended, MTI began working with another online trading platform, Trade 300. Interestingly, the FSCA found evidence on a desktop that was confiscated during a raid on the residence of an MTI manager, suggesting that Steynberg controls Trade 300.

The missing bitcoins

In the meantime, the FSCA is suggesting that freezing the MTI account with FX Choice opened a can of worms. According to the regulator, research shows that “the total number (number) of frozen crypto assets at FX Choice is a negligible amount” compared to “the total assets that MTI has invested for its customers”. The FSCA explains this inconsistency as follows:

FX Choice confirmed that from January 29, 2020 through June 3, 2020, MTI staked 1846.72 bitcoin and posted a loss of 566.68 bitcoin, an approximate capital loss of 30%.

However, when there was a fallout with FX Choice, MTI claimed “on July 21, 2020 it transferred 16,444 bitcoins from FX Choice to Trade 300 in 4 installments; July 22nd, 2020 or July 24th, 2020. “

Meanwhile, according to its own investigations, the FSCA did not provide any evidence to support MTI’s claim to have transferred the 16,444 BTC. The controller explains:

The FSCA noted that there was no Bitcoin withdrawal by MTI from FX Choice in July 2020. The last withdrawal of Bitcoin by MTI from FX Choice was made in August 2019. In addition, FX Choice confirmed that none of the eight sending wallets were related to FX Choice and FX Choice had neither received nor sent payments to any of the eight Bitcoin wallets. “

Perhaps as a sign that the MTI Bitcoin scam is slowly resolving, the regulator announces that it has “received complaints that investors have failed to repay their investments.” In the social media, which Steynberg and his employees often used to refute allegations of fraud, anxious investors complain about “late” withdrawals.

What do you think of the results from the FSCA probe? Let us know what you think in the comments section below.

Tags in this story

Bitcoin wallet, injunction, fake business, authority for financial sector conduct, fraud, FX Choice, Johann Steynberg, law enforcement, Mirror Trading International (MTI), tiered marketing fraud, online bitcoin trading, trading accounts, trading bot

Photo credit: Shutterstock, Pixabay, Wiki Commons

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