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An anonymous group under the moniker MTILeaks released what it claims to be the full transaction history of Mirror Trading International (MTI), which has been accused of being a Ponzi scheme, a claim denied by the company’s management.
MTI has yet to make a statement on the authenticity of the data dump, although the Financial Sector Conduct Authority (FSCA) says it is aware of the data leak and is investigating it.
Last month, the FSCA said it was investigating MTI’s unlicensed Forex trading activities and its outlandish claims of returns of up to 10% per month. The FSCA advised MTI members to request their money back without delay.
Read: FSCA investigating Mirror Trading International
“Our advice has not changed since we issued our statement on ITNs last month,” says Brandon Topham, FSCA’s chief of investigations. “We recommend that customers request their money back without delay. Our investigation into the company is ongoing. “
The fact that MTILeaks was able to capture the entire transaction history, apparently without hacking, points to a “low budget” and poor website security, according to a source who asked not to be identified.
“All data was obtained using simple scratch and enumeration techniques on the mymticlub.com site. Hacks were not carried out because the lack of basic security did not require it, ”says a statement from MTILeaks.
“If your bank gave you access to any other customer’s data in such an insecure way, would you trust them to trade your Bitcoin?”
But what’s inside the database may be more concerning: it suggests that the company has received deposits of more than R4 billion since its inception and has paid R309 million to the founders. Withdrawal requests from members reportedly amount to R2.9 billion, leaving “money in the bank” of R1.3 billion after accounting for withdrawn amounts and canceled withdrawals.
Moneyweb tried unsuccessfully to contact MTI. Several MTI customers contacted Moneyweb when we previously reported on the company to ensure they were receiving the promised returns.
Read: Get-rich-quick scheme draws a crowd, despite regulators calling for time out
A MTI client says he was able to verify that the company’s reported Forex trading is accurate. The company says it has stopped trading forex in an effort to remain compliant with regulators and switched to trading bitcoins using computerized algorithms. That claim has also surprised the crypto community.
Going from trading one asset class to another with virtually no pause, and seemingly without a break in earnings, has skeptics in disbelief.
In a statement issued last month to Global Crypto, MTI refuted allegations that its multi-level marketing system is a Ponzi scheme, stating that “members can add or withdraw their funds [bitcoin] at any time, without complications or fees ”. CEO Johann Steynberg added that MTI wants to change the reputation of the online passive income generating industry and make sure the company is professionally managed and complies with all regulations.
Foreign regulators are sounding the alarm too
However, regulators in Texas and Canada recently raised the alarm about MTI’s business practices. The company is accused of making misleading claims about its returns, while the Quebec Financial Market Authority listed MTI as a company illegally soliciting investors. MTI clients are rewarded with a 10% commission for new registrations.
“Investing in MTI is as safe as walking openly through downtown Joburg with fists full of dollars and blindly hoping that no one will catch you,” says MTILeaks.
A separate analysis of MTI by South African blockchain researchers shows that by the first week of August, a total of 15,351 bitcoins had been sent to various addresses controlled by MTI. That is worth $ 170 million (R2.78 billion) at current bitcoin prices.
Read: Joining MTI May End In Tears
MTI only accepts deposits in bitcoins. Some local exchanges have reported an increase in demand for bitcoins in recent months, at least some of which are destined for MTI. “We started noticing this a few months ago and we started questioning people who appeared to be older and who were buying bitcoins to participate in MTI. Although we didn’t have much information at the time, we advised caution, ”says a crypto executive who asked not to be identified.
All bitcoin transactions are visible on the blockchain, making it possible to trace bitcoins destined for MTI and where they originated.
Most of these bitcoins are bought on crypto exchanges like Luno, VALR, Binance, and Coinbase and then shipped to addresses controlled by MTI. Crypto exchanges have no control over the destination of bitcoins sent by clients, although some have started questioning clients and advising against them.
Where MTI has been sending bitcoin deposits from investors
The data dump suggests that of the bitcoin received by MTI, a total of 3,755 appear to have been sent to online sports betting site Cloudbet.com and another 845 to FXChoice, a Belize-based forex trading broker.
In June, FXChoice blocked MTI’s trading account after investigating its high-performance claims and its use of multi-level marketing to attract new clients.
“Before the account was blocked, [MTI] it executed only a few large, manual trades, and incurred substantial losses, ”says a statement from FXChoice, adding that it is still awaiting documents to confirm the source of the funds.
The MTILeaks database shows a payment of R1.45 billion to members, of which R360 million was in the form of bonuses for recommending new members.
There were some huge deposits in MTI, the largest being R44.8 million, followed by another individual who paid more than R34 million in 55 separate transactions.
From the founders, Clynton Marks would have withdrawn R23 million, his wife Cherie Marks R3.5 million, and CEO Johnny Steynberg R4.4 million.
The company has reportedly enrolled more than 160,000 members worldwide, 99,000 of them from South Africa, nearly 11,000 from the United States, and 4,923 from Namibia.
Canada, the United Kingdom, India, Nigeria, and Spain also have several thousand members.
The data dump also suggests that MTI is a ‘members’ and ‘founders’ scheme.
“There are ‘founding’ members of MTI, and then there are the regular members. It is important to distinguish between the two, as the founding members’ ‘buckets’ are not easily traceable and it would appear that they get a better ROI. [return on investment] than regular members. The statistical data clearly shows this. “
Less than pristine history
MTILeaks also points to the past history of several of the founders, many of whom were involved in unreliable multi-level marketing schemes in the past. As we previously reported, Cheri Marks (nee Ward) and now her husband Clynton were behind BTC Global, which fell into a fireball in 2018 after the Hawks reported that $ 50 million (R854 million) had been lost in the scam. .
In a statement issued to members last month, Steynberg writes: “The time has come to, once and for all, address and reframe the reputational issues of regulators, the media and potential members on this industry, through the MTI demonstrating that a Bona Fida (sic) business and brand using an innovative business model of integrity can exist and grow sustainably in this sector. Personally, I am very determined to do this and, together with and with the support of MTI’s professional advisers, this process is already underway. “
MTILeaks is available here (you need the Tor browser to access).
