A judge has issued a temporary restraining order on failed online bitcoin trading platform Mirror Trading International, outlining the criteria used when paying liquidity issues to investors. The order calls the liquid bitcoins “as [an] Intangible property that includes[s] property”
Claims for compensation must be submitted in local currency
A South African High Court judge has recently ruled that Mirror Trading International (MTI) – the collapsed Bitcoin Ponzi scheme – should use criteria when distributing recovered funds to the scheme’s investors. In addition, the judge, Judge MJ Dolamo, MTI investors must submit claims denominated in the local currency – rand.
According to a MyBroadband report, the judge’s temporary order requires liquidators to designate bitcoin assets as “intangible assets.” The report also states that the order reflects two circumstances that the judge considered in making the order. In the first case, Judge Dolamo held that MTI was an illegal scheme, therefore all agreements between members/investors and the defunct Bitcoin trading platform were void.
Using a complex compensation scheme that divides MTI’s investors into three different categories, the judge ordered liquidators to accept claims from investors with zero returns. The judge’s order also states that investors who spend less than their initial investment must reduce these drawings in order for their claims to be valued.
It is reported that the judge’s order regarding the investors in the 3rd category has been reported.
The liquidations may be traced to Tier 3 investors in respect of transfers made by the Company to these investors, in terms of profit(s)… when and where circumstances permit.
When the funds are returned, investors in this section will be allowed to assert their claims arising from their original investment in MTI “but not in terms of profits”.
There are no claims against individuals who defrauded MTI.
Meanwhile, in the second scenario where MTI investors become creditors, Justice Dolamo said liquidators should follow the Tier 2 investors “in terms of returns”. Liquidations for Tier 3 investors must follow both initial investments and profits.
In the year Following the collapse of MTI in late 2020, court-appointed liquidators are trying to recover investors’ funds from bitcoin Ponzi schemers. In response, some investors objecting to MTI’s liquidity have launched a legal challenge.
However, in his message to individuals accused of defrauding MTI, the judge said:
“There will be no claims against the company arising from such actions and the investigators are empowered to file charges against these individuals.
According to the report, the parties opposing the finality of the interim order will get an opportunity to state their reasons on October 31.
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