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Tax Collector Wants $55 Million From Collapsed Bitcoin Ponzi Scheme MTI — Liquidators Accused of Failing Their Duty

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In a new twist to the saga of the collapsed Bitcoin Ponzi Mirror Trading International (MTI) scheme, revenue collector South African Revenue Service (SARS) has demanded $55.3 million from the scheme’s liquidators. The revenue collector added that he wants the tax bill to be settled before the completion of the MTI liquidation process.

Liquidators fail ‘as supposed civil servants’

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A South African revenue collector has reportedly filed a lawsuit worth about $55 million against Mirror Trading International (MTI)’s now-defunct bitcoin Ponzi scheme. The lawsuit filed in the Supreme Court of Cape Town concerns two tax periods: 2019 and 2020.

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According to report from Moneyweb, the revenue collection body known as the South African Revenue Service (SARS), said it wants this tax bill settled before the MTI liquidation process is completed. As News previously reported, a total of $75 million was raised from the sale of bitcoins held by MTI, which were returned from forex trader FX Choice.

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SARS, which accuses the bankrupt firm’s liquidators of failing to fulfill their duties “as alleged government officials,” reportedly said it reserves the right to adjust its claim if additional bitcoins held by MTI are discovered.

In a statement to the Supreme Court, the revenue collector said that in addition to the late filing of income information, the liquidators failed to declare income of $10.8 million and $398 million received in 2020 and 2021, respectively.

Of the $55.3 million SARS is demanding from the liquidators, about $20.8 million is in ordinary income tax, according to a Moneyweb report. For underreporting, SARS said it was demanding $34.5 million from the liquidators.

SARS wants preferred creditor status

Additionally, while presenting evidence on behalf of SARS, Johan Mathews of the Revenue Collector’s Illicit Economics Division reportedly argued that the Revenue Collector should be granted preferred creditor status under the Insolvency Act. If this status is granted, the liquidators cannot distribute the returned funds until the tax collector’s claims are fully settled. SARS also said that if the report is not submitted within 40 days of the assessment, MTI liquidators will not be able to object or appeal.

The report also explains to the tax collector why he is not waiting for the liquidation process to complete.

“Given that the taxpayer [MTI] has been permanently liquidated and that the liquidators are in the process of completing the management of the estate, including the payment of interim dividends to proven creditors, there are reasonable grounds to believe that the taxpayer will not pay the full amount of the tax and that tax recovery may be difficult in the future,” SARS said in a statement.

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