South Africa has issued a securities fraud warning against Mirror Trading International.
The Financial Sector Conduct Authority claims ‘returns on the investments claimed by MTI seem far-fetched and unrealistic.’
When the FSCA began investigating Mirror Trading International is unclear. As per an August press-release however, they’ve apparently been in touch with founder Johann Steynberg (right).
MTI has informed us that they accept clients’ funds in the form of Bitcoin, pool the funds into one trading account on a forex derivative trading platform, and conduct high frequency trading through the utilisation of a Bot.
As BehindMLM did in our Mirror Trading International review, the FSCA has identified MTI’s business model as a securities offering.
This amounts to financial services, hence the licence requirement.
Of “much greater concern” than having failed to register with the FSCA, is that Mirror Trading International is a Ponzi scheme.
Moreover, the returns on the investments claimed by MTI seems far-fetched and unrealistic.
According to MTI its Bot-trading is able to generate consistent profits of an average of 10% per month.
The FSCA warns the public that MTI is not licensed to conduct the proclaimed business that they are conducting and that they are aware of the need for a FSP licence.
That last paragraph is of significance, as it bluntly counters MTI affiliate claims that securities offered using cryptocurrency are not regulated in South Africa.
The FSCA also cites MTI’s former broker FX Choice, and states they are in the process of validating the broker’s claim that MTI engaged in negligible trading activity.
Looking forward the FSCA advises their investigation into MTI is ongoing.
MTI has partially co-operated with the FSCA.
We are reviewing the information as it becomes available and will involve the South African Police Service if the discrepancies are confirmed.
We imagine cooperation ceased when MTI was no longer able to deny it was committing securities fraud. That would have gone hand in hand with being unable to provide evidence of trading revenue being used to pay affiliate ROI withdrawals.
MTI has undertaken to inform all of its clients of the investigation and to provide the opportunity to all its clients to withdraw their assets that are with MTI.
We recommend that clients request refunds into their own accounts as soon as possible.
This isn’t going to end well. Stay tuned…