The US Commodity Futures Trading Commission (CFTC) said: April 27th Having obtained a court judgment against a CEO involved in a Bitcoin-related scam.
CEO was involved in Bitcoin MLM
The case in question concerns Cornelius Johannes Steynberg of South Africa, who was the founder and CEO of Mirror Trading International Proprietary Limited (MTI).
Steinberg engaged in an international multi-level marketing (MLM) scheme to solicit public investment in Bitcoin.
Steynberg and his company promised investors the opportunity to participate in the commodity pool. Not only was that commodity pool not registered, but Steynberg and his MTI were in fact trading retail forex off-exchange when the pool’s trading activity was being run by bots. I mistakenly described it as being there. This two party of his ended up diverting all of the investor’s bitcoin.
Steynberg launched its MLM scheme in May 2018, raising funds from over 23,000 individuals in the US and around the world. In total he won around 30,000 BTC. This was his $1.7 billion equivalent when the scheme closed in March 2021.
Steinberg faces largest civil fine in CFTC history
The CFTC said it would fine Steinberg $3.4 billion. Half of that amount goes to reparations to victims, and the other half goes to civil penalties.
The above amount is the highest civil fine ever imposed by the CFTC, and the case itself is the agency’s largest fraud case involving Bitcoin to date.
Steinberg is also prohibited (or prohibited) from registering with the CFTC, participating in CFTC-regulated markets, or participating in any activity that violates commodity regulations. Steinberg said he has been detained in Brazil on an INTERPOL arrest warrant since December 2021 and is currently on the run from South African authorities.
The CFTC previously indicted Steynberg’s company directly in 2022. The agency has also taken action against many other crypto-related groups and individuals, including the Mango Markets hacker and his OokiDAO founder.
Most notably, in March, the CFTC announced indictments against major cryptocurrency exchange Binance and several of its executives.
It first appeared on CryptoSlate after the CFTC fined a South African CEO $3.4 billion over Bitcoin’s MLM scheme.
