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The Financial Sector Conduct Authority (FSCA) has raided the offices of Mirror Trading International (MTI) in Stellenbosch and Polokwane, as well as the home of two of its leadership team members in Durban.
The FSCA seized electronic and telephone records of cell phones, laptops, and computers at all three locations.
“At the request of the FSCA, three separate superior courts in three different jurisdictions issued orders for the FSCA to search the MTI-related facilities and seize the relevant information,” stated the FSCA.
The FSCA said the authorizations were obtained in terms of the Financial Sector Regulation Act, which allows it to obtain authorizations to conduct searches and seizures of information related to a financial sector infringement.
He also stated that, in terms of article 251 of the FSR Law, it is not allowed to comment on the content of the files and other seized data.
No arrests were made.
“We do not conduct criminal investigations and our investigations are in terms of the Financial Sector Regulations Act, which aims to protect the South African investing public and ensure that there is a safe financial sector,” said the FSCA.
“Our investigations may lead to the referral of evidence to other authorities or to SAPS.”
The FSCA explained that its next step is to examine the evidence and compare it with other information it has obtained.
“Upon conclusion, we will make decisions that involve whether to take administrative action against any person or forward the evidence obtained to other agencies.”
MyBroadband reached out to Mirror Trading International for comment on the raid, but the company did not respond at press time.
Regulators warn against MTI
The raid on MTI’s offices comes after the FSCA said it was investigating the company.
“We have been informed by MTI that they accept client funds in the form of Bitcoin, pool the funds in a trading account on a currency derivatives trading platform, and perform high-frequency trading using a bot,” said the FSCA.
If MTI operated as described, the FSCA stated that this would amount to offering financial services and would require a financial services provider license.
However, the FSCA had much greater concerns about MTI activities other than the lack of a license.
At the time, MTI claimed to have more than R2.9 billion in customer funds in business accounts, but the FSCA has not been able to conclusively confirm that the funds exist.
“Additionally, the investment returns claimed by MTI appear implausible and unrealistic,” said the FSCA.
MTI said at the time that its bot trading can generate consistent profits of an average of 10% per month. More recently, he said he has seen an average return of 0.5% per day.
The FSCA recommended that MTI clients request refunds to their own accounts as soon as possible.
The Texas State Securities Board also issued an emergency cease-and-desist order against MTI and charged it with perpetrating fraud through an illegal international multi-level marketing program.
The Autorité des Marchés Financiers (AMF) of Canada has placed MTI in its list of illegal online platforms, issuing a warning that MTI is illegally soliciting investors.
Anonymous MTI ZA Data Breach – The MTILeaks
Following the warnings of regulators around the world, a group calling itself Anonymous ZA released financial information about MTI based on data you claimed to have collected through the MTI member portal – mymticlub.com.
According to Anonymous ZA, it discovered security vulnerabilities in MTI’s online systems, which it exploited to extract information about the inner workings of the scheme.
Anonymous ZA said that the vulnerability that MTI’s back office system exposed was a lack of basic authentication.
Any registered member who is logged into the system could view the account information of any other member simply by changing a parameter in the URL.
“All data was obtained using simple numbering and scraping techniques on the mymticlub.com site,” stated Anonymous ZA.
“No hacks were carried out because the lack of basic security did not require it. Just incrementing an id =? in various URLs he provided all the data you see here. “
Using this weakness, he was able to gather detailed information about the MTI system and see the full names, usernames, email addresses, bitcoin balances, and earnings linked to each account.
Anonymous ZA later posted an anonymous copy of the data on an obscure website called MTILeaks.
He said that MTI’s database shows that the company has handled more than 22,984 bitcoins in member deposits, amounting to more than R4 billion.
Now Read: The Main People Behind Mirror Trading International
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