Provisional liquidators appointed to seize control of failed SA Bitcoin trader Mirror Trading International (MTI) are looking to widen the scope of their inquiry. They are wanting to extend their powers to include the right to call witnesses to an insolvency inquiry, appoint investigators and solicit information from banks, said Herman Bester, one of four interim supervisors appointed to begin work on the matter, according to a Bloomberg report on the Moneyweb site.

These controls are not typically granted by courts to liquidators acting in a provisional capacity.

MTI, which said in November it has more than 260 000 members, was placed under provisional liquidation last month – allegedly holding Bitcoin worth almost $880m.

A quadrupling in the price of the world’s best-known cryptocurrency over the past year has been accompanied by convictions in California and China in scams tied to digital platforms.

Investors from the US and Canada to Namibia and SA are preparing to lodge claims after being unable to redeem their funds from MTI.

The company last communicated to its customers through Telegram on 22 December, when MTI’s management told investors their CEO could be in Brazil, that they’ve been lied to, and are co-operating with authorities.

The firm’s liquidation was unopposed and e-mails sent to the company haven’t been responded to.

Authorities in SA and the US have probed the firm’s operations and a criminal case has been opened with the SAPS.

'Much of the work has been done by the Finance Sector Conduct Authority and the Texas State Securities Board,' Bester said.

The liquidators may also request the ability to operate across various jurisdictions, Bester said. The FSCA has said the firm was unlicensed to provide financial services and appeared to be misleading clients.

If liquidation proceedings remain unopposed, a final order may be granted on 1 March.

Full Moneyweb report