The Commodity Futures Trading Commission (CFTC) has imposed a ban on a South African Bitcoin (BTC) trading and networking company and fined it $1.7 billion for defrauding investors.
In new press releaseThe Commodity Futures Trading Commission (CFTC) announced that a judge has ruled that Mirror Trading International Proprietary Limited (MTI) must pay more than $1 billion to compensate victims of a fraud scheme involving foreign currency transactions.
“The order stems from a complaint filed by the Commodity Futures Trading Commission (CFTC) on June 30, 2022, and requires MTI to pay more than $1.7 billion in restitution to victims who were defrauded. The order also permanently prohibits MTI from committing further violations of the Commodity Exchange Act ( CEA), as charged, imposes a permanent trading ban in any CFTC-regulated markets as well as a registration ban against MTI.
The CFTC is also highlighting the default judgment issued against MTI founder and CEO Cornelius Johannes Steinberg in April.
The court found that from approximately May 2018 to March 2021, Steinberg and his company “engaged in a multi-level fraudulent international marketing scheme to obtain Bitcoin from people to participate in an unregistered commodity pool operated by MTI.”
The CFTC says Steinberg amassed at least 29,421 bitcoins worth more than $1.7 billion while executing the scheme. For his crimes, Steinberg must pay more than $1.7 billion in civil fines, the highest in any CTC case.
CFTC Director of Enforcement Ian McGinley says,
“The settlement with MTI and the default judgment against Steynberg represents the latest stage in our fight against fraudsters who have victimized more than 23,000 individuals from the United States.
Here, the scammers made the latest promises, claiming that their “advanced intelligence programs with Bitcoin as the base currency” would create untold wealth for investors, but they were actually committing a classic form of fraud, a multi-level marketing scam.
“Whether the scam involves fake e-trading ‘bots’ or Bitcoin, as this action involving a South African entity shows, we will pursue scam artists wherever they may be.”
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