The liquidators of the bitcoin Ponzi scheme, Mirror Trading International (MTI) have been ordered to pay $55.3 million by the South African tax collector, the South African Revenue Services (SARS). The tax collector clarified that the tax debt must be paid before the MTI liquidation process is complete.
A total of $75 million was reportedly realized from the sale of bitcoins belonging to MTI that were recovered from forex trader FX Choice.
SARS asserted in its filing with the Master of High Court that the liquidators failed to declare the $10.8 million and $398 million in income that were realized in the years 2020 and 2021 respectively in addition to the late transmission of the income information.
Of the $55.3 million SARS requests from liquidators, around $20.8 million is for regular income tax. SARS claimed it seeks $34.5 million from the liquidators as restitution for underreporting revenue.
Also, when presenting evidence on behalf of SARS, Johan Matthews, from the revenue collector’s Illicit Economy Unit, reportedly argued that the revenue collector should be given preferential creditor status as per the South African Insolvency Act. If granted, this status bars liquidators from disbursing recovered funds until the revenue collector’s claims have been settled in full. SARS also said that unless a return is submitted within 40 days after assessment, MTI liquidators will be not able to object or appeal.
The report also quotes the revenue collector explaining why it is not waiting for the completion of the liquidation process.
“Taking into account that the taxpayer [MTI] has been finally liquidated and that the liquidators are in the process of finalizing the administration 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 tax and that the recovery of the tax may be difficult in future,” SARS said.