CFTC’s largest Bitcoin fraud case requires CEO to pay $1.73 billion penalty

CFTC ordered South Africa-based bitcoin pool operator Mirror Trading International to pay $1.73 billion in restitution for defrauding investors.
In June 2022, CFTC described this as the “largest ever fraud scheme case involving bitcoin.”
MTI’s key figure Cornelius Johannes Steynberg is at the center of this lawsuit.

Akash Girimath FXStreet

The Commodity Futures Trading Commission (CFTC) announced on April 28 that the Judge Lee Yeakel of the US District Court for the Western District of Texas entered an order of default judgment and permanent injunction against Cornelius Johannes Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited (MTI).

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CFTC’s largest settlement to date

The aforementioned order was entered on April 24 in response to the complaint filed on June 30, 2022. MTI’s scheme promised its users a stable return of 10% with a bonus to those that referred friends and family.

Steynberg lured users from across the world and ran his multilevel scheme from May 2018 through March 2021. When the regulatory pressure from South Africa and the US started to mount, MTI entered bankruptcy proceedings.

CFTC’s recent publication states the defendants were responsible for siphoning at least 29,421 BTC from at least 23,000 individuals. At the end of March 2021, Bitcoin holdings were valued a little over $1.73 billion.

The order finds that Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited (MTI), a company currently in liquidation in the Republic of South Africa, is liable for fraud in connection with retail foreign currency (forex) transactions, fraud by an associated person of a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations."

The recent order from the judge requires MTI’s CEO to pay $1.73 billion in restitution to the inflicted. Additionally, Steynberg is permanently enjoined from engaging in conduct that violates the Commodity Exchange Act (CEA).

Bitcoin price currently hovers below $30,000 as it struggles to find a directional bias.

Author

Akash Girimath

FXStreet

Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.