S African regulators are seeking to exercise more control over cryptocurrency trading post-obit the collapse of what was declared to be the largest Ponzi scheme the country has e'er seen.

Cocky-proclaimed Bitcoin (BTC) trading business firm Mirror Trading International was placed in provisional liquidation in December 2020 every bit investors tried and failed to withdraw their funds. The business 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.

All the same, an investigation by the Financial Sector Conduct Authorisation revealed the house kept no bookkeeping records, nor whatsoever kind of user database. The visitor's management claimed to have been misled by CEO Johann Steynberg, who information technology says may have fled to Brazil.

Lawyers for the firm'south remaining direction stressed that the FSCA had non nevertheless ascertained that MTI was operating as a Ponzi scheme, merely that it was trading without a license.

The FSCA's caput of enforcement, Brandon Topham, told Bloomberg that prosecuting authorities had to be able to stop such schemes earlier they gathered momentum:

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

To that end, the authority is making proposals to formally regulate the trading of cryptocurrencies similar Bitcoin, Topham said.

Topham said trying to become in early Ponzi schemes had go fairly common practice in South Africa:

"I take been on radio shows where people say, 'I am a professional Ponzi investor. You get in quick and go out and like with whatever concern you lot have to risk coin to make money.' Nosotros need to brand an case of MTI and then that people understand that investing in a Ponzi is never a skillful thought."

In July, the Texas State Securities Board shut down MTI operations taking place in its jurisdiction afterwards concluding that the project was a multilevel marketing scheme. Southward Africa's own regulators were already suspicious of MTI's claims that information technology would return 10% profit per month for every user.

"It's going to have a serious investigation to define how much was involved," Topham told Bloomberg, calculation that ii other firms were under investigation for possible ties to MTI. Liquidators have thus far failed to trace all of the company'southward assets and are expected to exist granted an expanded final liquidation social club on March 1, assuming legal proceedings remain unopposed.

While governments have flirted with cryptocurrency regulation for years, they are at present existence pushed into enacting physical laws due to the rise profile of Bitcoin and associated cryptocurrencies.

In December 2020, Coinbase CEO Brian Armstrong said that the United States Treasury Department was proposing laws that could see exchanges require a name and physical address for users involved in any crypto transaction exceeding $three,000 in value.