South African regulator, the Financial Sector Conduct Authority (FSCA), has initiated an investigation against the activities of Mirror Trading International for multiple operational concerns and urged its clients to “request refunds into their own accounts as soon as possible.”
The FSCA is concerned about the cryptocurrency trading company’s claims of holding 2.9 billion rands (over $168.8 million) in its clients’ trading accounts as the regulator could not confirm the existence of the funds.
International Multilevel Marketing for FX and Crypto
MTI accepts Bitcoin from its clients. Then they pool the funds in one account on a forex derivatives trading platform, and carry on high-frequency trading with sophisticated computer algorithms.
Currently, the platform does not hold any financial license from the market regulator. However, the FSCA pointed out that for the described services, the platform must have an FSP license.
The regulator also raised concerns on the 10 percent monthly returns promised by the platform, calling the claims ‘far-fetched and unrealistic’.
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“The FSCA also draws attention to the fact that FX Choice, the previous platform broker for MTI seems to have made public statements that gainsay the version of MTI in terms of trading volumes and Bot trading,” the regulatory warning stated.
Notably, FX Choice has blocked MTI’s account over regulatory concern.
The South African regulator has already initiated an investigation on the platform, but MTI only co-operated ‘partially’.
“We are reviewing the information as it becomes available and will involve the South African Police Service if the discrepancies are confirmed,” the warning added.
Similar to the South African financial watchdog, MTI also faced warnings in the US and Canada. The Texas State Securities Board issued a cease-and-desist order against MTI and a few others in July, for the forex and crypto-related international multilevel marketing scheme.