South African regulators are seeking to exercise more control over cryptocurrency trading following the collapse of what was alleged to be the largest Ponzi scheme the country has ever seen.
Self-proclaimed Bitcoin (BTC) trading firm Mirror Trading International was placed in provisional liquidation in December, as investors tried and failed to withdraw their funds. The firm claimed to have attracted over 260,000 memberships worldwide, handling a reported 23,000 Bitcoin — a sum now worth in the region of $716 million.
However, an investigation by the Financial Sector Conduct Authority revealed the firm kept no accounting records, nor any kind of user database. The company’s management claimed to have been misled by CEO Johann Steynberg, who they say may have fled to Brazil.
Lawyers for the firm’s remaining management stressed that the FSCA had not yet ascertained that MTI was operating as a Ponzi scheme, only that it was trading without a license.
The FSCA’s head of enforcement, Brandon Topham, told Bloomberg that prosecuting authorities had to be able to stop such schemes before they gathered momentum:
“At the point something becomes a Ponzi scheme, weTitle: Scams are driving South African authorities to regulate crypto trading
Sourced From: cointelegraph.com/news/scams-are-driving-south-african-authorities-to-regulate-crypto-trading
Published Date: Wed, 27 Jan 2021 10:17:28 +0000