Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Public money, private plans: MPs demand Post Office transparency

      13 June 2025

      Coal to cash: South Africa gets major boost for energy shift

      13 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      10 red flags for Apple investors

      13 June 2025
    • World

      Yahoo tries to make its mail service relevant again

      13 June 2025

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025

      Trump tariffs to dim 2025 smartphone shipments

      4 June 2025

      Shrimp Jesus and the AI ad invasion

      4 June 2025

      Apple slams EU rules as ‘flawed and costly’ in major legal pushback

      2 June 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Cryptocurrencies » SA to crack down on bitcoin after alleged Ponzi scheme unravels

    SA to crack down on bitcoin after alleged Ponzi scheme unravels

    By Agency Staff26 January 2021
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    South Africa’s finance-industry regulator wants more power to prosecute perpetrators of fraud and oversee dealing in cryptocurrencies after the collapse of a bitcoin trader, alleged to be the country’s largest Ponzi scheme.

    The Financial Sector Conduct Authority is making proposals to regulate trading in cryptocurrencies such as ethereum, XRP and litecoin, the watchdog’s head of enforcement, Brandon Topham, said in an interview.

    The FSCA has handed details of its probe into the failure of Mirror Trading International to a top police unit after uncovering alleged fraud.

    At the point something becomes a Ponzi scheme, we have lost our jurisdiction. We need the police and the prosecuting authority to work fast and put people in jail

    “At the point something becomes a Ponzi scheme, we have lost our jurisdiction,” he said. “We need the police and the prosecuting authority to work fast and put people in jail.”

    MTI — which in November claimed it had 260 000 members and 23 000 bitcoin now worth about US$740-million — was placed in provisional liquidation last month after clients battled to withdraw funds. On 22 December, the firm’s management said in a letter posted on Telegram that they were misled and that the company’s CEO, Johann Steynberg, may have fled to Brazil.

    Four temporary overseers must now begin tracing MTI’s investors to recover the firm’s assets, including money allegedly paid to some early players that runs into millions of rands. The FSCA investigation found that the company kept neither accounting records nor a comprehensive register of participants, apart from 170 000 unique email addresses found during an October raid.

    No licence

    The FSCA investigations hadn’t concluded MTI to be a Ponzi scheme and the regulator only noted it was trading without a licence, Clynton and Cheri Marks, who joined the firm in August as head of the referral programme and head of communications respectively, said in an e-mail sent by their lawyer, Henry Selzer.

    “MTI set out to see what requirements are necessary to obtain a licence,” they said. “When it became apparent that such a licence would be impossible to obtain, Johann Steynberg moved MTI to crypto-trading for which apparently no licence was required. The live trades were demonstrated to the FSCA during 2020 and MTI cooperated with every request from the FSCA.”

    A quadrupling in the price of the world’s best-known digital token toward the end of last year has been accompanied by convictions abroad in scams tied to digital platforms and speculation that authorities globally will seek tighter controls.

    While the Marks have had no contact with Steynberg, or knowledge of his whereabouts since the matter came to light, they are sure he “will repay to members their bitcoin investments as that is the character of the Johann Steynberg they came to know”, their lawyer said.

    The couple denied any negligence. Regulators and liquidators were unable to supply contact details for Steynberg.

    MTI’s membership base stretched across the globe. The Texas State Securities Board in July issued a cease-and-desist order against it. At present, the FSCA hasn’t received formal requests to assist law-enforcement agencies abroad but is expecting queries, Topham said.

    The FSCA is also looking into what transpired at two other firms believed to have a relationship with MTI

    “It’s going to take a serious investigation to ascertain how much was involved,” Topham said. The FSCA is also looking into what transpired at two other firms believed to have a relationship with MTI, he said.

    Investors are drawn into potential scams because of South Africa’s persistently sluggish economic growth and greed, Topham said. The testimonials of sports stars or other prominent figures are also a lure.

    Another alleged South African Ponzi scheme in 2009 snared about 800 investors across eight countries, including Qatar’s Barwa Real Estate. Barry Tannenbaum, who was accused of running the alleged R12.5-billion scam, moved to Australia and at the time said that some of the allegations against him were “drivel”.

    “I have been on radio shows where people say, ‘I am a professional Ponzi investor. You get in quick and get out and like with any business you have to risk money to make money’,” Topham said. “We need to make an example of MTI so that people understand that investing in a Ponzi is never a good idea.”  — Reported by Roxanne Henderson, (c) 2021 Bloomberg LP



    Barry Tannenbaum Bitcoin Brandon Topham FSCA Mirror Trading International MTI top
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleEU chief assails Internet giants over freedom of speech
    Next Article Eswatini backs out of anti-China ‘Clean Network’ pledge

    Related Posts

    Bitcoin smashes R2-million mark in record-breaking rally

    22 May 2025

    Trump tariffs are now slamming crypto

    7 April 2025

    How stablecoins could unlock trade in South Africa

    1 April 2025
    Company News

    Huawei Watch Fit 4 Series: smarter sensors, sharper design, stronger performance

    13 June 2025

    Change Logic and BankservAfrica set new benchmark with PayShap roll-out

    13 June 2025

    SAPHILA 2025 – transcending with purpose, connection and AI-powered vision

    13 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.