A group called Anonymous ZA dumped what it claims to be the entire 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 about the authenticity of the data dump, though the Financial Sector Conduct Authority (FSCA) says it is aware of the data leak and is looking into it.
Last month the FSCA said it was investigating the activities of MTI for conducting unlicensed forex trading, and its extravagant claims of returns as high as 10% a month. The FSCA advised MTI members to ask for their money back without delay.
Read: FSCA investigating Mirror Trading International
“Our advice had not changed since we issued our statement on MTI last month,” says Brandon Topham, head of investigations at the FSCA. “We recommend clients ask for their money back without delay. Our investigation into the company is ongoing.”
The fact that MTILeaks was able to grab the entire transaction history, apparently without hacking, points to “low budget” and shoddy website security, according to one source who asked not to be named.
“All data was acquired using simple enumeration and scraping techniques on the mymticlub.com site. No hacks were performed because the lack of basic security did not require it,” says a statement by MTILeaks.
“If your bank gave you access to any other customer’s data in such an insecure fashion, would you trust them to trade with your Bitcoin?”
But what’s inside the database may be of greater concern: it suggests the company has taken in deposits of more than R4 billion since inception and paid out R309 million to the founders. Withdrawal requests by members reportedly total R2.9 billion, leaving “money in the bank” of R1.3 billion after withdrawn amounts and cancelled withdrawals are accounted for.
Moneyweb attempted without success to contact MTI. Several MTI clients contacted Moneyweb when we previously reported on the company to reassure us they were receiving returns as promised.
Read: Get-rich-quick scheme pulls a crowd, despite regulators calling time-out
One MTI client says he was able to verify forex trades reported by the company as accurate. The company says it has stopped trading in forex in an effort to remain compliant with regulators and switched to trading bitcoin using computerised algorithms. That claim has also raised eyebrows in the crypto community.
Switching from trading one asset class to another virtually without pause – and apparently without a break in profits – has the sceptics is 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 are able to add or withdraw their funds [bitcoin] at any time, with no complication or fees”. CEO Johann Steynberg added that MTI wants to change the reputation of the online passive income generating industry and ensure that the company is professionally managed and complies with all regulations.
Overseas regulators sound the alarm too
Yet regulators in Texas and Canada recently sounded the alarm over 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 that solicits investors illegally. MTI clients are rewarded with 10% commissions of new sign-ups.
“Investing in MTI is about as safe as openly walking through the middle of central Joburg with fists full of dollars and blindly hoping nobody mugs 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 bitcoin had been sent to various addresses controlled by MTI. That’s worth $170 million (R2.78 billion) at current bitcoin prices.
Read: Joining MTI may end in tears
MTI only accepts deposits in bitcoin. Some local exchanges have reported a spike in demand for bitcoin in recent months, at least some of which is destined for MTI. “We started to notice this some months back and began questioning people who appeared to be elderly and buying bitcoin to participate in MTI. Though we didn’t have much information at the time, we advised caution,” says one crypto executive who asked not to be named.
All bitcoin transactions are visible on the blockchain, so it is possible to trace bitcoin destined for MTI and where it originated.
The majority of these bitcoin are purchased on crypto exchanges such as Luno, VALR, Binance and Coinbase and then shipped to addresses controlled by MTI. Crypto exchanges have no control over the destination of bitcoin sent by customers, though some have started to question clients and advise them against it.
Where MTI has been sending investors’ bitcoin deposits
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 a further 845 to FXChoice, a Belize-based forex trading broker.
In June FXChoice blocked MTI’s trading account after investigating its high return claims and its use of multi-level marketing to attract new customers.
“Before the account was blocked, [MTI] executed just a few trading operations, which were performed manually, large and incurred substantial losses,” says a statement from FXChoice, adding that it is still waiting for documents to confirm the source of funds.
The MTILeaks database shows a payout of R1.45 billion to members, of which R360 million was in the form of bonuses for referring new members.
There were some huge deposits into MTI, the largest being R44.8 million, followed by another individual paying over R34 million in 55 separate transactions.
The company has reportedly signed up more than 160 000 members around the world – 99 000 of them from SA, nearly 11 000 from the US and 4 923 from Namibia.
Canada, the UK, India, Nigeria and Spain also have several thousand members.
The data dump also suggests that MTI is a scheme of ‘members’ and ‘founders’.
“There are ‘founder’ members of MTI, and then there are just regular members. It is important to distinguish between the two, as the ‘deposits’ of founder members aren’t easily traceable, and it would appear as if they get better ROI [return on investment] than regular members. The stats data clearly shows this.”
MTILeaks also points to the past history of several of the founders, many of whom were involved in dodgy multi-level marketing schemes in the past. As we previously reported, Cheri Marks (nee Ward) and now husband Clynton were behind BTC Global, which went down in a ball of flames 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 for once and for all, address and reframe the reputational perception issues of regulators, the media and potential members about this industry, through MTI demonstrating that a genuine Bona Fida (sic) business and brand using an innovative business model of integrity can exist and grow sustainably in this sector. I am personally very determined to see this through and together with and supported by MTI’s professional advisors, this process is now underway.”
MTILeaks is available here (you need the Tor browser to access it).