SA Ponzi scheme Mirror Trading International (MTI) has been ordered to pay $1.7bn (R32bn) in restitution to thousands of victims in the US.

Fin24 reports that a federal judge handed down the restitution order against MTI, a bitcoin trading scheme, last week.

The order described MTI as an ‘international fraudulent multi-level marketing scheme’ that broke a host of US laws. The ruling was signed by representatives of MTI's liquidators in SA, who have been trying to track down thousands of missing bitcoin for the past two years.

MTI, which was headquartered in Stellenbosch, collapsed in December 2020 after it abruptly halted payments to members.

At the same time, its founder and CEO Johann Steynberg went missing. Steynberg was later tracked down and arrested in Brazil on an Interpol arrest warrant, where he is still awaiting an extradition hearing.

In April, a US judge ordered Steynberg to pay $1.73bn (roughly R32bn) in restitution to defrauded victims and another $1.73bn as a civil monetary penalty.

This was the highest civil monetary penalty ever ordered in a case involving the Commodity Futures Trading Commission (CFTC). 

Last week's $1.7bn penalty against MTI, which is separate from the US Government's against Steynberg, brings the CFTC’s enforcement case against MTI to a close.

‘The (MTI) fraudsters made the most modern of promises, claiming their 'Advanced Intelligence Software with Bitcoin as the base currency' would create untold wealth for investors, but were actually committing a classic form of fraud, a multilevel marketing scam,’ said CFTC director of enforcement Ian McGinley.

It is unlikely that US victims of the fraud will see any funds soon, however.

The CFTC said it would ‘not take any action to collect payment for the restitution obligation’, given that MTI's liquidators filed for bankruptcy proceedings in the US earlier this year. 

In SA, MTI is being investigated by the Hawks, although no criminal charges have been brought. 

The Fin24 report says prosecutors have also submitted an extradition request to bring Steynberg back to SA in April 2022, but a hearing has yet to take place.

The Western Cape High Court, meanwhile, has ruled that MTI ‘clearly amounted to an unlawful Ponzi scheme’.

For the past two years, the group's liquidators have been searching for billions of rands in missing bitcoin.

They have to date recovered 1 281 bitcoin – which they have already cashed in for just over R1bn from FXChoice, an online forex broker which froze MTI's assets three years ago. 

Full Fin24 report