South African regulators are seeking to exercise more control over cryptocurrency trading following the collapse of what was alleged to be the largest Ponzi scheme the country has ever seen.

Self-proclaimed Bitcoin (BTC) trading firm Mirror Trading International was placed in provisional liquidation in December, as investors tried and failed to withdraw their funds. The firm claimed to have attracted over 260,000 memberships worldwide, handling a reported 23,000 Bitcoin — a sum now worth in the region of $716 million.

However, an investigation by the Financial Sector Conduct Authority revealed the firm kept no accounting records, nor any kind of user database. The company’s management claimed to have been misled by CEO Johann Steynberg, who they say may have fled to Brazil.

Lawyers for the firm’s remaining management stressed that the FSCA had not yet ascertained that MTI was operating as a Ponzi scheme only that it was trading without a license.

The FSCA’s head of enforcement, Brandon Topham, told Bloomberg that prosecuting authorities had to be able to stop such schemes before they gathered momentum:

“At the point something becomes a Ponzi scheme, we have lost our jurisdiction. We need the police and the prosecuting authority to work fast and put people in jail.”

To that end, the authority is making proposals to formally regulate the trading of crypto currencies like Bitcoin (BTC), Topham said.

Topham said trying to get in early on Ponzi schemes had become fairly common practice in South Africa:

“I have been on radio shows where people say, ‘I am a professional Ponzi investor. You get in quick and get out and like with any business you have to risk money to make money.’ We need to make an example of MTI so that people understand that investing in a Ponzi is never a good idea.”

In July the Texas State Securities Board shut down MTI operations taking place in its jurisdiction, after concluding that the project was a multi-level marketing scheme. South Africa’s own regulators were already suspicious of MTI’s claims that it would return 10% profit per month for every user.

“It’s going to take a serious investigation to ascertain how much was involved,” Topham told Bloomberg, adding that two other firms were under investigation for possible ties to MTI. Liquidators have thus far failed to trace all of the company’s assets, and are expected to be granted an expanded final liquidation order in March. 1, assuming legal proceedings remain unopposed.

While governments have flirted with cryptocurrency regulation for years, they are now being pushed into enacting concrete laws due to the rising profile of Bitcoin and associated crypto currencies.