An international multilevel marketing scheme was allegedly operated by Cornelius Johannes Steynberg, the CEO and founder of Mirror Trading International (MTI), to solicit Bitcoin from the public. As per the accusations of the Commodity Futures Trading Commission (CFTC), Steynberg committed fraud in connection with retail foreign-currency transactions and other violations, resulting in a record-breaking penalty of USD 3.4 billion being imposed on him.
The court order, which was entered by Judge Lee Yeakel of the U.S. District Court for the Western District of Texas, found that Steynberg had committed the fraudulent activity from at least May 2018 through March 2021. The penalty includes a USD 1.7 billion fine and USD 1.7 billion in restitution to defrauded victims, who also include U.S. citizens. The CFTC has permanently banned Steynberg from trading in any of its regulated markets.
Since December 2021, Cornelius Johannes Steynberg, who is evading law enforcement in South Africa, has been detained in Brazil on an Interpol arrest warrant. MTI, the company he founded, is currently under liquidation in South Africa. In June 2022, the CFTC charged Steynberg with fraud when it came to light that MTI had never been registered with the commission in any capacity. It has been alleged that the group participated in off-exchange, retail forex trading with the aid of leverage, margin, and financing through a proprietary software program.
The regulator claims Steynberg accepted at least 29,421 Bitcoin, worth around USD 1.7 billion at the end of the relevant period, from at least 23,000 U.S. participants and even more throughout the world without being registered as an associated person of a commodity pool, as required by federal law. The CFTC said, “Either directly or indirectly, the defendants misappropriated all of the Bitcoin they accepted from pool participants.” However, the regulator has warned that orders requiring payment of funds to victims may not result in the recovery of any lost money due to insufficient funds or assets from wrongdoers.
