South African CEO Ordered to Pay $3.4 Billion in BTC Fraud

South African CEO Ordered to Pay $3.4 Billion in BTC Fraud

A federal court in the Western District of Texas has ordered Cornelius Johannes Steynberg, the South African CEO of Mirror Trading International Proprietary Limited (MTI), to pay a total of $3.4 billion for his involvement in a $1.7 billion retail forex and commodity pool fraud. The order was given by Judge Lee Yeakel on Monday and includes $1.7 billion in restitution to investors who were defrauded of about 30,000 Bitcoin (BTC), and another $1.7 billion in civil monetary penalty.

The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action against Steynberg in July 2022 for running an unregistered commodity pool between May 2018 and March 2021. According to the CFTC, the pool defrauded at least 23,000 individuals in the US and other investors worldwide. Steynberg solicited participation in the pool through BTC payment, but the company was neither registered as a commodity pool operator (CPO) nor complied with CPO regulations.

The case is the largest action against BTC fraud by the CFTC and received cross-border support from regulators in South Africa and Belize. The $1.7 billion penalty awarded by Judge Yeakel is the highest civil monetary penalty ever awarded in a CFTC case.

Mirror Trading International was shut down in October 2020 after investigations by regulators in South Africa found that it was a Ponzi scheme. The CFTC’s action against Steynberg is part of its ongoing efforts to protect investors and crack down on fraud in the derivatives markets.

Tricks To Evasion

The CFTC has stated that Steynberg is evading South African law enforcement but was apprehended in Brazil in December 2021 after an Interpol arrest warrant was issued.

The watchdog has alleged that Steynberg utilized “an international fraudulent multilevel marketing scheme” to conduct the fraud. Steynberg and MTI purportedly traded retail forex off-exchange using a fake proprietary ‘bot’ or software program. The CFTC has also accused the Founder and his associates of being involved either directly or indirectly in the fraudulent activity.

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