Judge in MTI Liquidation Case Issues Order Designating Bitcoin an Intangible Asset – Regulation Bitcoin News

A judge in the collapsed online bitcoin trading platform Mirror Trading International’s liquidation case has issued a provisional liquidation order that outlines the criteria to be used when reimbursing investors. The order also reportedly directs the liquidators to regard bitcoin “as [an]Intangible assets that are[s] property.”

All claims for reimbursement must be submitted in local currency

A South African High Court judge recently granted an order outlining the criteria that liquidators of Mirror Trading International (MTI) — the collapsed bitcoin Ponzi scheme — should use when distributing recovered funds to the scheme’s investors. In addition, the judge, Justice MJ Dolamo, said MTI investors should submit claims denominated in the local currency — the rand.

According to a Mybroadband report, the judge’s provisional order requires liquidators to designate bitcoin as an “intangible asset” that constitutes property. In the report, it was stated that two scenarios were presented in the provisional order. Justice Dolamo assumed that MTI was illegal and therefore any agreements between investors/members with the now defunct Bitcoin trading platform are null.

The judge ordered liquidators to take claims from MTI investors who have zero returns. This was done by using a complicated compensation system that divided MTI investors into three categories. The judge’s order also states that investors whose withdrawals are less than their initial investment need to deduct such drawings so that the value of their claims is determined.

Concerning investors in the category named Class 3, the judge’s order reportedly said:

The liquidators may pursue the Class 3 Investors in respect of all transfers made to these investors by the company, including in respect of the profit(s)… when and where the circumstances so permit.

When the funds are recovered, investors in this class will also be allowed to prove their claims arising from the initial investment in MTI “but not in respect of profit.”

There are no claims for individuals who defraude MTI

Meanwhile, under the second scenario in which MTI investors become creditors, Justice Dolamo said liquidators should go after the Class 2 investors “in respect of in the returns.” For Class 3 investors, liquidators should go after both the initial investments and the profits.

Following the collapse of MTI in late 2020, court-appointed liquidators have been attempting to recover investor funds from the bitcoin Ponzi scheme’s masterminds. In turn, some investors opposed to MTI’s liquidation have mounted a legal challenge.

The judge, however, sent this message to those accused of fraudming MTI.

“They will not have any claims against the Company emanating from such conduct and the liquidators are vested with a cause of action against these individuals… to reclaim dispositions to these individuals by the by Company, when and where the circumstances so permit.”

According to the report interested parties can object to having the provisional orders declared final on October 31.

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Terence Zimwara

Terence Zimwara, a Zimbabwean journalist, writer and author who has been awarded the Zimbabwe Booker Prize. He is a prolific writer on the economic woes of African countries, as well as digital currencies that can be used to provide an escape path for Africans.