The Financial Services Conduct Authority (FSCA) raided the offices of a local cryptocurrency trading company on Monday.
The offices of Mirror Trading International (MTI), located in Polokwane, Stellenbosch and Durban, were raided by the authority's officials.
FSCA executive, Brandon Topham says the raid forms part of an ongoing investigation.
Mirror Trading International is a South African registered company offering Forex trading services by using an automated system to trade with the trading pool on behalf of its members.
The FSCA announced in August that they would be investigating the company as they were of the view that their business model required them to be in possession of a financial service provider license.
MTI accept clients’ funds in the form of Bitcoin, pool the funds into one trading account on a forex derivative trading platform, and conduct high-frequency trading through the utilisation of a Bot.
The FSCA says if this is being done as described, then it amounts to financial services, hence the licence requirement.
However, the FSCA has a much greater concern about the activities of the company.
MTI claims to have more than R2.9 billion (at current conversion rates) in clients’ funds in trading accounts, but the FSCA was unable to conclusively confirm that the funds exist.
Moreover, the returns on the investments claimed by MTI seem far-fetched and unrealistic.
