The latest crime report from blockchain analysis company Chainalysis named Mirror Trading International (MTI) the biggest cryptocurrency scam in 2020. After Chainalysis reached this conclusion, an investigation found that MTI had collected $589 million from more than 471,000 deposits. According to the report, MTI’s revenue is significantly higher than the second largest scam Forsage and J-enco. The revenue of these two scams is less than 350 million US dollars.
More South African victims
At the same time, in the report’s brief focus on MTI, Chainalysis shows that more than half of MTI’s network traffic comes from South Africa. On the other hand, Canada, Mexico, the United Kingdom and the United States together account for nearly a quarter of the remaining network traffic. Using this network traffic data, the blockchain analysis company concluded: “Most MTI victims also come from these countries in a similar proportion.”
In addition, the blockchain analysis company’s report also found that the BTC sent to MTI “mainly came from exchanges.” So-called self-hosted wallets are also used. Then, the report details how MTI used the popular gambling service to launder investor funds. The report explains:
Perhaps the most interesting is that MTI Club apparently uses a popular cryptocurrency gambling service as a money laundering and withdrawal mechanism. In terms of transaction volume, the platform is the most risky destination for MTI funds. The platform obtained $39 million worth of cryptocurrency from a scam in 2020.
As a venture capitalist Dovey Wan pointed out, the use of this gambling platform has become “a common money laundering technique for many cybercriminals who use cryptocurrency.” This is because gambling platforms can be used “similar to mixed use to cover up The source and flow of illegally obtained funds.”
How MTI lures victims
As reported by news.Bitcoin.com, MTI promised to provide a stable return of 0.5% per day, thus successfully attracting unsuspecting victims. This rate of return will be converted into “500% annual revenue.” MTI claims on its website that these high returns are guaranteed by “its AI-driven foreign exchange trading software.”
However, MTI’s unrealistic promise soon led to fraud charges. Initially, after the US and South African regulators lashed out at the company, MTI executives denied the allegations that they operated a multi-level marketing scam. However, at some point after the Financial Sector Conduct Authority (FSCA) searched the residences of some MTI executives, there were reports that investors failed to withdraw funds. As the pressure increased, CEO Johann Steynberg eventually disappeared with investor financial support. Eventually lead to the collapse of MTI.
At the same time, the Chainalysis crime report concluded that the MTI scam is a good example, “why the industry must spread the statement that algorithmic trading platforms that promise unrealistic high returns are almost always scams.” The report also Said that cryptocurrency exchanges and other services must “prevent users from sending money to these addresses, or at least warn them that financial losses are likely to occur.”
Do you agree that MTI is the biggest scam in 2020? Tell us what you think in the comments section below.
Picture Credits: Crime reports from Shutterstock, Pixabay, Wiki Commons, Chainalysis,
Disclaimer: This article is for reference only. It is not a direct offer or solicitation of an offer, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. The company or the author is not directly or indirectly responsible for any damage or loss caused or allegedly caused by the use or reliance on any content, goods or services mentioned in this article or related thereto.