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Legal Move to Recoup MTI Losses: Summonses Issued Amid Liquidation Proceedings

Published January 27, 2024
10 months ago

Recent developments have emerged in the ongoing legal proceedings against the members involved in the Mirror Trading International (MTI) pyramid scheme. The liquidators in charge have confirmed their action of issuing summonses to certain individuals, emphatically labeled as net winners of the illegal operation. These members are reportedly part of an online community discussing their involvement in MTI and have been identified as beneficiaries who now face the obligation to return their earnings.


According to reports, notices were sent out even before the court had communicated a clear guideline on how to address the repayment issue. Acting Justice Alan Maher's ruling in November 2023 provided a method for calculating the investors’ financial positions, which involved converting the bitcoin deposits into their rand value on the respective dates of deposit and withdrawal.


The liquidators’ action of issuing early summonses indicates a strategic move to prevent the statute of limitations, known in South Africa as prescription, which typically bars debt collection after three years. The urgency of issuing the summonses seems to be a preemptive step to avoid potential expiry of the claims against the individuals who profited from the scandal.


The pyramid scheme, which hinged on bitcoin trading, collapsed, leading to a provisional liquidation declaration on December 29, 2020, and the final order followed six months later on June 30, 2021, by Acting Justice Alma De Wet. This progression has been significant in laying the groundwork for the liquidators to carry out their legal mandate of recovering assets and distributing them to the victims.


In their statements, the liquidators explained the complexities of determining the exact prescription date for claims, indicating that it is a convoluted matter without a straightforward resolution. This informs their swift and continuous actions of legally pursuing the recovery of claims to prevent them from possibly becoming void.


Further elaboration by the liquidators reveals an active communication line with the creditors, with the latest circular detailing imminent plans. They mentioned the organization of the seventh Special meeting, aimed at tabulating claims and preparing for the eighth that follows thereafter. As of January 19, 2024, a total of 8,550 claims had been received and registered, revealing the scale of the scheme’s impact.


For creditors, the path to restitution remains clear but timing is uncertain as the process depends on the lodging and approval of the second liquidation and distribution account with the Master of the Court. Presently, the liquidators project they might extend clarity on the estimated schedule for repayments by the end of March 2024. This next step is pivotal for all proven creditors, who await the ultimate setting of dates for the dividend payments.


Victims of the MTI scheme, therefore, remain in a waiting pattern, holding on to the hope that the coordinated efforts by the liquidators will bring about tangible recovery of lost funds as they navigate the intricate processes of insolvency law.



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