The US Commodity Futures Trading Commission (CFTC) has announced a landmark achievement in a fraud case related to Bitcoin, which has resulted in a penalty payment of $3.4 billion. The case revolved around Mirror Trading International Proprietary Limited (MTI), a company that allegedly deceived thousands of investors by illegally obtaining over $1.7 billion worth of Bitcoin.
About the Lawsuit
The CFTC filed a lawsuit against MTI in 2022, alleging that the company had orchestrated a fraudulent scheme that promised investors high returns on their Bitcoin investments. MTI’s CEO, Johann Steynberg, initially evaded law enforcement in South Africa and became a fugitive. Subsequently, he was detained in Brazil pursuant to an INTERPOL apprehension order dating back to December 2021.
According to the CFTC, MTI utilized a variety of websites and social media accounts to lure investors into their scheme by offering the possibility of substantial returns through cryptocurrency exchange trading. Nevertheless, the CFTC alleged that MTI did not engage in any actual Bitcoin trading and instead utilized the funds of new investors to pay off earlier ones, as well as to enrich its own executives.
As MTI’s CEO, Steynberg, a citizen of South Africa, has been instructed by the authorities to pay $1.73 billion in restitution to victims who were deceived by an international fraudulent multilevel marketing scheme. Along with the restitution, Steynberg is subject to a civil monetary penalty of $1.73 billion. It has also come to light that Steynberg asked members of the public for Bitcoin in exchange for participation in an unregistered commodity pool, which was valued at over $1.7 billion as of March 2021.
The Bitcoin Fraud
Between May 2018 and March 2021, MTI has been accused by the CFTC of accepting over 29,421 BTC from approximately 23,000 individuals in the US and globally. At the time, Bitcoin was worth more than $1.7 billion, and presently, its value is around $867 million.
Steynberg was convicted of multiple charges, which include deceit related to retail foreign currency transactions, registration infringements, and not complying with the CPO regulations.
As a result, Steynberg has been issued a permanent ban from participating in any activities that contravene the CEA Act. Additionally, he is prohibited from registering with the CFTC or engaging in trading activities within its regulated markets.