The US Commodity Futures Trading Commission (CFTC) said on April 27 that it has obtained a court ruling against a CEO involved in Bitcoin-related fraud.
CEO was involved in Bitcoin MLM
The case in question concerns Cornelius Johannes Steynberg of South Africa, the founder and CEO of Mirror Trading International Proprietary Limited (MTI).
Steynberg participated in an international multi-level marketing (MLM) scheme in which he solicited Bitcoin investment from the public.
Steynberg and company promised investors the opportunity to participate in a commodity pool. Not only was that commodity pool unregistered, Steynberg and MTI falsely portrayed the pool’s trading activity as being managed by bots, when in fact they were trading forex off-exchange. The two companies eventually embezzled all Bitcoin from their investors.
Steynberg began his MLM plan in May 2018, seeking funds from more than 23,000 individuals in the US and worldwide. He obtained nearly 30,000 BTC in total, worth $1.7 billion when the plan closed in March 2021.
Steynberg faces CFTC’s largest-ever civil fine
The CFTC said it will fine Steynberg $3.4 billion. Half of that amount goes to compensation for victims, the other half to a civil fine.
The above amount is the highest civil fine imposed by the CFTC, and the case itself is the agency’s largest fraud case involving Bitcoin to date.
Steynberg is also prohibited (or barred) from registering with the CFTC, participating in CFTC-regulated markets, and engaging in activities that violate commodity rules. Steynberg has been held in Brazil since December 2021 on an INTERPOL arrest warrant and remains a fugitive from South African authorities, today’s announcement said.
The CFTC has previously sued Steynberg’s company directly in 2022. The agency has also taken action against numerous other crypto-related groups and individuals in recent months, including a Mango Markets hacker and the founders of OokiDAO.
Notably, in March, the CFTC announced charges against major cryptocurrency exchange Binance and several of its executives.
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