The U.S. Commodity Futures Trading Commission (CFTC) has announced a significant victory against fraudulent activity in the cryptocurrency market. On Thursday, the U.S. District Court for the Western District of Texas ordered Mirror Trading International (MTI), a South African company, to pay a hefty fine of $1.73 billion for its involvement in a multi-level investing scheme that exploited both foreign exchange (FX) and cryptocurrency elements.
MTI, once considered a popular trading company, was revealed to be a global Ponzi scheme by the CFTC. The firm and its CEO Cornelius Johannes Steynberg had been encouraging people to participate in their multilevel global marketing scheme from May 2018 through March 2021. Investors were persuaded to send their Bitcoins (BTC) to a pool claimed to be supported by Bitcoin-based advanced intelligence software capable of generating income.
However, according to CFTC's investigation, these funds were traded on over-the-counter (OTC) desks and nearly 30,000 Bitcoins (BTC) disappeared as a result of the scheme. The scam targeted more than 23,000 individuals from the U.S., promising them untold wealth through their 'Advanced Intelligence Software with Bitcoin as the base currency.'
U.S. Judge David Ezra found MTI liable for fraud in connection with retail foreign currency transactions, fraud by a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations. The platform is now undergoing a liquidation procedure in South Africa.
Ian McGinley, CFTC Director of Enforcement, emphasized that this is the largest Bitcoin-based fraud ever exposed by his entity. "The settlement with MTI and default judgment against CEO Steynberg represent the latest stage in our battle against fraudsters," he said.
The court order also permanently bans MTI from further violations of the Commodity Exchange Act, imposes permanent trading bans on any CFTC-regulated market, and places a registration ban against MTI. The same sum of $1.73 billion must be paid to victims in restitution by the owner of the scheme.
However, the CFTC acknowledged that the order may not result in payouts to victims due to the possibility that the culprits may not have sufficient funds to cover fines and restitution. The regulator continues to stress caution and due diligence when investing in cryptocurrency-related schemes.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.