Acting Justice Alan Maher has issued a ruling on the liquidation hearing of Mirror Trading International (MTI), which has played a large role in defining the role of cryptocurrency in South African law.

MTI gained global attention in September 2020 when vulnerabilities were exploited in its poorly-coded website.  Liquidation proceedings began after the company’s collapse in December of 2020, following the disappearance of its CEO Johann Steynberg.

The Judge declared that MTI was unlikely intended to be anything other than a Ponzi-type scheme. MTI is estimated to have traded somewhere between 29,421 to 46,000 bitcoins, and with the current bitcoin price, MTI’s assets are valued at around R20.6 billion, surpassing other notorious schemes like BHI Trust and Travel Ventures International, making it the largest financial scam in South African history.

The liquidators sought guidance on how to treat Bitcoin deposits and withdrawals, and Maher's ruling distinguishes between net losers, net winners, though clients are generally expected to be able to recover between 50% and 60% of their initial deposits.

Bitcoin has been declared a form of digital money, treated as intangible, movable property, though not recognized as legal tender in South Africa.

Judge Maher has left open the possibility of reclaiming withdrawals from both net winners and losers, depending on various circumstances.

Liquidators have recovered close to R1.1 billion, largely through the sale of frozen bitcoins on Luno. SARS and other entities have lodged claims worth hundreds of millions.

The timeline for initial payments has not yet been finalized, but liquidators are excited about the outcome, as it enables them to initiate proceedings.