So said Cheri Marks, the head of communications and marketing of the South African bitcoin trading platform Mirror Trading International. 

MTI, which held out the promise of lavish returns for investors via the cryptocurrency bitcoin, as well as commissions for recruiting new members, was provisionally liquidated last month after the market regulator, the Financial Sector Conduct Authority, said it was an illegal operation that was misleading clients and had contravened several laws. The FSCA probe is continuing. 

Marks said she had not been in contact with Steynberg since Monday, December 14, three days before the market regulator announced it believed that MTI is an illegal operation. Around that time the scheme stopped paying out funds to members. 

According to Marks, Steynberg "willingly" decided to leave South Africa. "We advised against it. He decided to leave."

Hawks probe

MTI is now being probed by the Hawks, who are working with colleagues investigating an earlier alleged bitcoin scam uncovered in 2018. Before being provisionally liquidated, MTI's leadership denied it was a ponzi scheme, accusing detractors of being jealous of its success. 

The online trading platform, which promoted itself heavily on social media and via influencers in the cryptocurrency community, experienced rapid growth last year, allegedly reaching 260 000 members who may have invested over R9 billion.

Thousands of members have been unable to withdraw their investments, and are now waiting anxiously for the outcome of the liquidation proceedings to see if they will get anything back. But these proceedings could take months if not years to tie up.

"I can't believe what they did. So many people, including myself, lost their incomes during this year, [and were] just looking to substitute our household income. Now it's gone and we are a month down on payments," said an MTI member who asked to remain anonymous.

Selling a dream 

While probes into MTI and the nature of its business are continuing, Professor Mark Button, director of the Centre for Counter Fraud Studies at the University of Portsmouth in the UK, says he expects evidence to show that online get-rich-quick schemes have proliferated since the start of the Covid-19 pandemic.

Button, speaking of online ponzi schemes in general, said that lots of people in financial difficulties are looking for a means to improve their situation. At the same time, people have more time on their hands  - due to being furloughed, losing their jobs, recovering from illness - which "may expose them to such schemes when online occupying their time".

Button said the allure of bitcoin was a strong driving factor in online scams. 

"Crypto-currencies and bitcoin have been shown in the media to have benefited some hugely," he said. "There have been reports this week in the UK of a man who threw away his computer which at the time had worthless Bitcoin on, now worth £250 million (he wants permission from council to dig up a landfill site!). These illustrate the huge gains and fraudsters sell the dream they can achieve something similar. People see that some have made major gains and they buy into that dream." 

For Marks, Steynberg is the only person who can conclusively explain what happened at MTI. "I cannot decide what the deciding factor was that led to all of us being here, since so little confirmed or verified information is available," she said.

"The only time I ever had any doubts about MTI was when I saw the [market regulator] FSCA report from the 17th of December. The answers to all our questions lie with Johann Steynberg."

News24