Report: Judge in MTI Liquidation Case Issues Order Designating Bitcoin an Intangible Asset
A judge in the collapsed online bitcoin trading platform Mirror Trading International’s liquidation case has issued a provisional liquidation order that outlines the criteria to be used when reimbursing investors. The order also reportedly directs the liquidators to regard bitcoin “as [an] intangible asset that constitute[s] property.” Claims for Reimbursement Must Be Submitted in Local Currency
A South African High Court judge recently granted an order outlining the criteria that liquidators of Mirror Trading International (MTI) — the collapsed bitcoin Ponzi scheme — should use when distributing recovered funds to the scheme’s investors. In addition, the judge, Justice MJ Dolamo, said MTI investors should submit claims denominated in the local currency — the rand.
According to a Mybroadband report, the judge’s provisional order requires liquidators to designate bitcoin as an “intangible asset” that constitutes property. The report also said the order proffers two scenarios that the judge looked at when he issued it. Under the first scenario, Justice Dolamo assumes MTI was an illegal scheme, therefore all agreements between members/investors and the defunct bitcoin trading platform were thus void.
Using a complex compensation method that divides MTI investors into three different categories, the judge directed liquidators to accept claims from investors with zero returns. The judge’s order also states that investors whose withdrawals are less than their initial investment need to deduct such drawings so that the value of their claims is determined.
Concerning investors in the category named Class 3, the judge’s order reportedly said: The liquidators may pursue the Class 3 Investors in respect of all transfers made to these investors by the company, including in respect of the profit(s)… when and where the circumstances so permit.
When the funds are recovered, investors in this class will also be allowed to prove their claims arising from the initial investment in MTI “but not in respect of profit.”
No Claims for Individuals That Defrauded MTI
Meanwhile, under the second scenario in which MTI investors become creditors, Justice Dolamo said liquidators should go after the Class 2 investors “in respect of in the returns.” For Class 3 investors, liquidators should go after both the initial investments and the profits.
Following the collapse of MTI in late 2020, court-appointed liquidators have been attempting to recover investor funds from the bitcoin Ponzi scheme’s masterminds. In turn, some investors opposed to MTI’s liquidation have mounted a legal challenge.
However, in his message to individuals accused of defrauding MTI, the judge ruled:
“They will not have any claims against the Company emanating from such conduct and the liquidators are vested with a cause of action against these individuals… to reclaim dispositions to these individuals by the by Company, when and where the circumstances so permit.”
According to the report, interested parties who object to having the provisional order declared final will have an opportunity to give their reasons on October 31.
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Tags in this story liquidators, MTI, Ponzi, reimbursement, South Africa
What are your thoughts on this story? Let us know what you think in the comments section below. Terence Zimwara
Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route. India"s Central Bank RBI Starts Digital Currency Pilot With 4 Banks: Report REGULATION | 1 day ago Report: Saudi Arabia"s Central Bank Hires Virtual Assets and Digital Currency Program Lead REGULATION | 2 days ago
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