MTI investors fight liquidators

Mirror Trading International (MTI) investors are fighting back against demands from the liquidators that any bitcoin withdrawn from the Ponzi scheme be repaid, but at today’s prices.

Investors are lawyering up and resisting demands from the liquidators for repayment.

In a letter to the Master of the Cape High Court, attorney John Lister of Lister & Company says he acts for about 415 investors who are being sued by MTI liquidators for the return of bitcoin withdrawn from the scheme, or if that’s not possible, the return of the equivalent value in rands – but at today’s prices.

Moneyweb recently reported on the case of Ben Janse van Vuuren who invested R20 000 in MTI in July 2020, but withdrew his funds, then worth R21 000, a few months later when he suspected he may be involved in a scam.

The amount involved in this case was 0.13 bitcoin. The price of bitcoin has shot up since 2020, which meant Van Vuuren would have to pay the liquidators R97 000.

Van Vuuren, like hundreds of other MTI investors, has lawyered up.

A lawyer contacted by Moneyweb believe the MTI liquidators are wilfully misreading the Insolvency Act for their own ultimate benefit.

The longer and more numerous the court cases, the more income they stand to make.

One issue the lawyer have with the liquidators’ reading of the Insolvency Act is that the courts have yet to make a ruling on the factual insolvency of MTI. The Supreme Court of Appeal ruled that repayment of an investor’s capital did not constitute a “disposition without value”.

In April last year, the Western Cape High Court in Cape Town ruled that MTI was an illegal scheme and all agreements between the company and investors were void from the outset.

In that case, Acting Judge Alma de Wet refused to rule that MTI was factually insolvent, and that any dispositions made by MTI preferred one or more creditors over the others – as was requested by the liquidators.

Three classes of MTI investors

In another case before the high court in November 2023, Acting Judge Alan Maher divided MTI investors into three classes:

► Those who invested in the scheme and received nothing in return;

► Those who withdrew less than they invested in the scheme; and

► Those who withdrew more than they invested, thereby profiting in the scheme.

Legal argument

Lister argues that the liquidators have opted to demand repayment of bitcoin, or the rand equivalent in today’s prices, based on Section 32(3) of the Insolvency Act, which allows for the recovery of property at the date of disposition or the setting aside of the disposition, whichever is the higher.

However, this section of the act is irrelevant in this case because of the Maher judgment, says Lister.