South African boss of alleged Bitcoin Ponzi scheme arrested in Brazil
RIO DE JANEIRO, BRAZIL – Johann Steynberg, CEO of Mirror Trading International (MTI), a South Africa-based trading platform, was arrested in Brazil for being associated with a Bitcoin (BTC) Ponzi scheme.
Brazilian police recently arrested Steynberg on Dec. 30, 2021, in Goiânia province. The subject mobilized around 16,000 BTC from several cryptocurrency investment platforms between 2019 and 2020.
“After intensive identification and surveillance work, and with the help of information provided by the Brazilian Federal Police, it was possible to identify and address the suspect, who was pretending a false identity at the time of the approach,” the South American country’s security forces announced.
South Africa’s Financial Sector Conduct Authority (FSCA) reported that MTI’s “senior management” was conducting an “illegal operation and deceiving its clients.” Following the authorities’ warning, Steynberg fled the country in 2020 after preventing users from accessing their investments.
They also warned that MTI did not have the licenses to offer financial services with cryptocurrencies.
Since 2021, South African financial regulators have been working to establish regulatory rules for cryptocurrencies, departing from their policy of not intervening in the sector.
THE BEGINNINGS
MTI began its operations in 2019. Within a year, in 2020, the platform had 260,000 registered people worldwide and traded 23,000 BTC, as reported by Bloomberg.
The platform’s expansion reached the United States, forcing the FBI to get involved in the investigation to help the South African Ponzi scheme liquidators recover investors’ assets.
As explained on the related CryptoNews page, Ponzi schemes are a type of fraud in which those who get in first receive interest from the investments of new participants. This requires getting new participants to join until the scheme eventually collapses.
After the collapse of MTI and facing the fact that there was no way to pay back investors their cryptocurrencies, Steynberg decided to leave.
On the other hand, FSCA revealed that MTI switched from a broker called FXChoice, regulated under Belize law, to an unregulated broker named Trade300. During the investigation, the authorities requested information about MTI’s transfers of customer funds from FXChoice to Trade300.
In this context, MTI stated that it transferred more than 16,000 BTC from FXChoice to Trade300 to some bitcoin wallets in four installments between July 21 and July 24, 2020. As far as could be verified, Trade300’s website is no longer accessible at this time.
FSCA stated that the only reference to the Trade300 website is the name “Joe Steyn,” an alias of Steynberg himself. It is suspected that the transfers were made to a platform managed by the same manager.
Authorities in the African country pointed out that Steynberg had stated under oath and to the press that the trading company was generating a 10% monthly return. He had never had a trading day with negative profits. Promises of returns of this magnitude are suspect in a market characterized by high volatility.
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| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| BTC | 68,217 | -4.38% | -27.72% | 71,343 | 68,361 | 68,129 | 42,534,100,992 |
| ETH | 1,929 | -4.36% | -37.84% | 2,017 | 1,933 | 1,926 | 15,217,600,512 |
| SOL | 77.32 | -5.32% | -44.22% | 81.66 | 78.39 | 77.32 | 3,778,607,616 |
| XRP | 1.01 | -3.21% | -55.12% | 1.04 | 1.01 | 1.01 | 2,527,532,288 |
| BNB | 630.38 | -3.91% | -31.15% | 656.05 | 631.14 | 629.47 | 1,412,986,880 |
| ADA | 0.17 | -3.93% | -66.44% | 0.17 | 0.17 | 0.17 | 301,003,328 |
| DOGE | 0.06 | -2.93% | -59.06% | 0.07 | 0.06 | 0.06 | 670,442,880 |
| AVAX | 8.23 | -1.38% | -45.54% | 8.34 | 8.25 | 8.22 | 299,648,288 |
| LINK | 9.82 | -3.09% | -28.85% | 10.13 | 9.88 | 9.82 | 306,291,040 |
| DOT | 0.81 | -2.34% | -71.04% | 0.83 | 0.82 | 0.81 | 71,939,896 |
| LTC | 49.40 | -1.17% | -49.34% | 49.98 | 49.52 | 49.32 | 228,067,760 |
| BCH | 221.26 | -1.59% | -53.92% | 224.84 | 221.98 | 221.10 | 136,851,552 |
| TRX | 0.31 | -1.12% | +6.65% | 0.32 | 0.31 | 0.31 | 455,283,520 |
| XLM | 0.15 | -1.68% | -43.84% | 0.15 | 0.15 | 0.15 | 214,984,096 |
| HBAR | 0.06 | -4.05% | -59.97% | 0.06 | 0.06 | 0.06 | 73,242,368 |
| NEAR | 3.43 | +0.45% | +46.15% | 3.42 | 3.47 | 3.43 | 742,933,376 |
| ATOM | 1.36 | -5.12% | -51.40% | 1.43 | 1.37 | 1.36 | 23,809,124 |
| AAVE | 111.53 | -2.12% | -35.82% | 113.95 | 112.12 | 111.46 | 210,894,032 |
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