The cryptocurrency world is an amazing invention that returns the power of money to the people, but with great decentralization also comes great fraud. Over the years, several cryptocurrencies have been exposed as being either fraudulent or not all they seem to be, the most obvious scams being Squid Games Token and Tether.
As of July 1st, 2022, you have another to add to the list, as the CFTC in the United States has just charged Mirror Trading International with fraud. Keep reading to learn more about the situation and what the next steps are for those who are involved with the company.
What is Mirror Trading International?
Mirror Trading International is a South African-based self-proclaimed Bitcoin investment pool. Supposedly, as a member of the mining pool, you can give Mirror Trading your BTC and they will invest it similar to how a hedge fund invests USD. Then users will reap the benefits from these trades, such as returns and Bitcoin dividends.
Mirror Trading specifically boasted a 10% return rate on their different websites, offering documents from a broker to back up their claims. They claimed this broker was a bot that ran on proprietary software which took advantage of market arbitrage among other tactics to make money. They had different websites for Australia, South Africa, and America. The company is owned by Cornelius Johannes Steynberg who lives in Western Cape, South Africa.
The MTI Scam
As great as all of this sounds, it’s time to discuss the scam. According to court documents, anyone wishing to buy into this trading pool could do so using Bitcoin, and after a few months, they would receive some returns.
As it turns out, however, these returns weren’t because Steynberg was investing this Bitcoin, but rather because he was using the money given by new investors to pay out the old. This is known as a Ponzi scheme and it is completely illegal.
It was discovered that the broker documents presented on the website were completely falsified and Steynberg had no intention of ever investing anyone’s money he received. In total, he received over $1.7 billion USD equivalent or 29,421 BTC from the United States alone. The US government has no idea how much he may have received worldwide. He did so without being registered as a commodity pool which is why the CFTC is now involved.
The MTI scam allegedly ran from May 18, 2018, until March 30, 2021. In addition to using his website to recruit people for his pool, Steynburg was also using social media to attract members to his investment.
MTI Owner on the Run
Although South Africa has an extradition agreement with the United States, Steynberg has been on the run from South African law enforcement. With thousands of dollars at his fingertips available for use, it’s no surprise he has evaded law enforcement.
He was most recently spotted in Brazil where he was detailed by Interpol. It is unclear if he is still detained, or if he was released, and where he is now.
What Can MTI Investors Do?
Are you an investor in MTI? It can be sad to find out something you have believed in was actually a scam, but the good news is, that the CFTC is seeking full restitution for all those who were taken advantage of by the defendant.
If you were involved, it is likely you will be contacted by the CFTC as the case proceeds. You can also contact the CFTC and find out if there is anything you need to present to be included in the settlement. This is an open case and it will likely be a few years’ time before a conclusion is reached.
No matter what happens, don’t let a single scam let you lose your faith in cryptocurrency, as there are many legitimate products out there, you just have to do your research in order to find them.
Red Flags that Indicate Cryptocurrency Scam Like MTI
Even if you weren’t involved in the MTI scam, it can be scary to hear about it. But as mentioned above, if you do your research, there are several legitimate projects you can invest in. Just watch out for these red flags when it comes to investing in cryptocurrency.
It Sounds too Good to be True
The most obvious sign something is a scam is that it sounds too good to be true. There is no such thing in this life as free money (except for when you visit the MintDice.com faucet of course!) and any site promising 10% returns or more should be considered too good to be true.
There is No Proof
Companies can make all the claims they want without having to back up their claims. And even if they do, scrutinize these documents very carefully. It may even be beneficial to hire someone to review the whitepaper of any project in which you intend to invest. They may be able to spot false documents much easier than you and save your life savings from being taken by a scam.
While there are many legitimate projects available overseas, Bitcoin is an easy borderless currency and crooks take advantage of this. Review where a project is located closely. If it isn’t a company that is considered reputable in its country, or in a reputable country, this is a bad sign.
The Individual Running it Doesn’t Have the Right Background
It is very challenging to develop a cryptocurrency project. It is even more difficult to act as a stockbroker and trade commodities. If someone is running a financial company but doesn’t have any background in finance or technology on their website this is a bad sign.
It is good practice to check the LinkedIn accounts of any project you intend to invest in as these can be a good way to flush out posers. If there is no LinkedIn account, or if it doesn’t show the proper background, do not invest.
Overall, it will be interesting to see what is the outcome of the court case against MTI. Hopefully, all those who lost their money in the scam will have their money returned to them. In the meantime, ensure you use the aforementioned tips to avoid other cryptocurrency scams as you go about investing in cryptocurrency, and remember never to invest any money you aren’t prepared to lose.