A US Federal court has ordered South African national, Cornelius Johannes Steynberg, CEO of the company Mirror Trading International (MTI), to pay a record of $3.4 billion in penalties for operating an international Bitcoin fraudulent scheme Mirror Trading International (MTI).
According to a press release by US Commodity Futures Trading Commission (CFTC) on Thursday, April 27th, Steynberg will have to pay $1.7 billion in restitutions to defrauded Bitcoin (BTC) investors and an additional $1.7 billion in civil monetary penalty. CFTC noted that MTI was the largest Bitcoin fraudulent scheme charged and the highest civil penalty ordered in the regulator’s history.
Mirror Trading International (MTI) Case
CFTC charged MTI and its CEO Cornelius Johannes Steynberg in June 2022 for operating a fraudulent Bitcoin scheme. MTI, based in Stellenbosch, South Africa, touted itself as a trading and networking company that used Bitcoin as its base currency and to pay member bonuses. The company filed for bankruptcy in 2021 and is currently in liquidation in South Africa.
According to the CFTC complaint, From May 2018 to March 2021, MTI and its CEO engaged in an international multi-level marketing (MLM) scheme to solicit Bitcoin from investors “for participation in an unregistered commodity pool MTI operated.”
They heavily marketed the scheme on social media and using websites like: “www.mirrortradinginternational.au.za,” “www.mtimembers.com,” and “www.mymticlub.com.”
MIT and Steynberg falsely promoted that the platform features a proprietary trading bot to harvest substantial gains for pool investors. However, this was a lie and the MTI commodity pool was not even registered as a commodity pool operator (CPO) as required. According to the complaint:
“The commodity pool was controlled by MTI and Steynberg and purportedly traded off-exchange, retail foreign currency on a leveraged, margined and/or financed basis with participants who were not eligible contract participants (ECPs) through what the defendants falsely claimed was a proprietary “bot” or software program.”
During the operating period, the scheme solicited at least 29,421 Bitcoin, worth more than $1.7 billion in March 2021, from at least 23,000 individuals in the U.S., and even more worldwide.
The Judge Lee Yeakel of the US District Court for the Western District of Texas has now ordered Strynberg “to pay $1,733,838,372 in restitution to defrauded victims and a $1,733,838,372 civil monetary penalty.” He is a fugitive from South African law enforcement but has been detained in Brazil since December 2021.
In the past few months, CFTC has sped up its enforcement and regulatory activities alongside SEC. As reported, the commodities regulator has recently charged Binance group and its CEO Changpeng Zhao with numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations.
