US Regulator Slaps Trading Firm With $1,700,000,000+ Penalty for Defrauding Thousands of Victims, Taking 29,420 Bitcoin
US Regulatory Authority Imposes Over $1.7 Billion Penalty on Trading Firm for Widespread Fraud and Seizure of 29,420 Bitcoins
The Commodities Trading Futures Commission (CFTC) has taken decisive action against a South African Bitcoin (BTC) trading and networking company, imposing a monumental penalty of over $1.7 billion and a comprehensive ban for defrauding investors.
In an official press release, the CFTC announces that a judge has ruled in favor of the regulatory body, ordering Mirror Trading International Proprietary Limited (MTI) to disburse more than $1.7 billion as restitution to the victims who fell prey to its fraudulent activities, centered around foreign currency transactions.
The CFTC's action originates from a complaint filed on June 30, 2022, and entails a court order compelling MTI to make substantial restitution payments to those who suffered losses due to their fraudulent actions. The order also permanently restrains MTI from engaging in any further violations of the Commodity Exchange Act (CEA), as alleged, and imposes an enduring ban on their participation in any CFTC-regulated markets, alongside a registration ban on MTI.
The CFTC underscores a default judgment previously rendered against MTI's founder and CEO, Cornelius Johannes Steynberg, in April.
According to the court's findings, between approximately May 2018 and March 2021, Steynberg and his company orchestrated an international fraudulent multilevel marketing scheme to solicit Bitcoin investments, funneling funds into an unregistered commodity pool operated by MTI.
The CFTC discloses that Steynberg accumulated no less than 29,421 BTC, with a total value exceeding $1.7 billion, during the execution of this scheme. As part of the penalties imposed, Steynberg is obligated to pay a civil monetary penalty exceeding $1.7 billion, marking the highest monetary penalty ever recorded in any CFTC case.
Ian McGinley, Director of Enforcement at the CFTC, emphasizes the significance of this settlement and judgment, stating:
"This settlement with MTI and the default judgment against Steynberg represent the latest phase in our ongoing battle against fraudulent actors who victimized over 23,000 individuals in the United States.
In this case, the perpetrators lured victims with enticing promises of 'Advanced Intelligence Software with Bitcoin as the base currency,' ostensibly offering untold riches to investors. However, they were, in reality, perpetrating a classic form of fraud, namely, a multilevel marketing scam.
Whether scams involve fictitious electronic trading 'bots' or cryptocurrencies, as illustrated by this case involving a South African entity, we are committed to pursuing these fraudsters regardless of their location."