MTI and Bitconnect Cryptocurrency Scandals
Recently there has been a lot of news coverage on a specific cryptocurrency known as MTI. For those of you that aren’t familiar, MTI or Mirror Trading International, is a Bitcoin investment scheme or trading pool, which claims to help users grow their Bitcoin through trading with daily returns and is based out of the country of South Africa.
What is a Trading Pool?
A trading pool is a collection of individuals who discuss and communally invest in certain products in regards to a specified market (such as an ICO or the stock market). Trading pools often have many individuals involved and thus claim to have large influences over the market they are buying or trading in. For example, a trading pool will invest heavily in a certain asset, driving attention to it and attracting other investors. After the other investors buy in and the price raises, the trading pool will then cash out for profit which could lead the asset to crash. MTI claims to have over 90,000 members in their trading pool but the trades they execute on a daily basis are supposedly done by only a handful of people.
MTI Background
As stated above, MTI claims to be a cryptocurrency trading pool which gives members gains daily from Bitcoin trading activities. While this may sound like no big deal and an easy way to make money often times offers such as these are too good to be true. Any time you invest your money in something like this it’s hard to guarantee your money is actually being used in the manner suggested. You have no way to verify that the “returns” you may generate from MTI are a result of trades.
A quick scan of the company’s website is enough to make most seasoned investors nervous. First of all, the English just sounds off, which since Bitcoin is a currency in any country language barriers shouldn’t normally be a big deal, however, a company claiming to make this sort of money should be able to hire an editor or writer to make their website sound more professional. The website is not user friendly compared to that of a number of altcoins on the market which is a clear indication the company is financially driven and not technology knowledgeable. Also, their website not only says you will receive daily returns creating “truly passive” income, but also that you receive rewards for recruiting friends or family into the pool.
The only positive is that they do wisely state that this is not a risk-free investment and that you could stand to lose your money which is wise advice. According to their about us section, MTI claims to currently hold over 10,000 Bitcoin which they claim to trade in markets on a daily basis. However, when asked for proof (more on this later) the company has been unable to show they have been making the trades they claim. Leading many people to believe that MTI is a Ponzi scheme.
Scandal
Giving your money to MTI and receiving money back every day sounds too easy right? And it probably is. Even the South African government agrees. In August 2020, the government advised people who had deposited money with MTI to withdraw their investment after they discovered MTI was operating without the required financial licenses. This didn’t stop MTI however, and shortly after the government announcement, they were quick to placate clients by indicating via telegram message that their lawyers were looking into the license issue.
The government warning was followed by a raid of the CEO’s (Cheri and Clynton Marks) home on October 26th, 2020 as officials were looking for proof of the alleged Bitcoin balances of the company and proper documentation about MTI’s trading actions. This raid was a result of the company seeming to (suspiciously) always generate returns and being classified as a Ponzi scheme. Not only that, but MTI claims to take 10% of the day’s profits, which for a financial product such as a trading pool, is extremely high. Regardless of the company being flagged as a scam in databases and on websites, the CEO’s continue to tell clients that everything is fine. Even after one of them was led away from the building raid by police.
Online chatter in forums has quickly connected this incident to having many similar features of the Bitconnect scandal in 2018 (more on this event below) and many users are fearful that MTI will soon be going under as well. Despite all of the allegations, there are still some die-hard MTI fans out there who swear there is money to be made through the trading pool. Either way, MTI has since promised they would release a video to quell everyone’s doubts about the company. As of the writing of this article, the promised video has not yet appeared.
Bitconnect
Bitconnect was released in 2016 as a financial product where users would receive interest payments for lending out their Bitcoin (sort of like a cryptocurrency bank). It became clear quite quickly that something wasn’t quite right with the way the company was operating, and people began to suspect that it was a Ponzi Scheme. Bitconnect rapidly became the subject of a number of investigations from government entities asking them to provide documentation for all the supposed money they were holding for investors. They were unable to do so and the company quickly went belly up as the value of their coin plummeted. You can learn more about the legal proceedings which followed by reading the Bitconnect Case article on the MintDice Blog. In the days since the writing of the Bitconnect Case, there have been few developments in this space as the partial owner of Bitconnect, Divyesh Darji, was arrested in August 2018. He was subsequently released and then was arrested a second time in 2019 when he ran a similar scan under a coin named Regal Coin.
Cryptocurrency Scams
Unfortunately, the scams covered in this article are not the only ones out there, and it is quite common for cryptocurrency investment opportunities to be scams. And the minute one is shut down, the person doing the scamming will just start another one. That is why it is so important when you choose to invest in cryptocurrencies that you do your research and discuss any opportunities you may have with someone you trust. In general, if it sounds too good to be true, such as offering promised or daily returns, it probably is a scam. Anyone who knows cryptocurrencies at all, knows they are a high-risk investment, meaning no one can promise you any returns if at all.
If you have questions about cryptocurrency investment, or would just like more information, MintDice.com offers a number of free guides as well as a blog which offer numerous insights into the cryptocurrency investment world.
