Cornelius Johannes Steynberg, the CEO of Mirror Trading International Proprietary Limited (MTI), has been fined a record fee of $3.4 billion by a Texas District Court Judge for his role in a Bitcoin fraud scheme.
The Commodity Futures Trading Commission (CFTC) released a press statement on the ruling on April 27, 2023, and called it the largest civil monetary penalty ever imposed by the CFTC. Steynberg was ordered to pay a fine of $1,733,838,372, and $1,733,838,372 in restitution to victims of the fraud.
Today, a federal court ordered a South African CEO to pay more than $3.4 billion for forex fraud, making this the CFTC’s largest fraud scheme case involving bitcoin. Learn more: https://t.co/X2vmHIRLkh
— CFTC (@CFTC) April 27, 2023
The U.S. CFTC filed a complaint lawsuit on June 30, 2022, accusing Steynberg of participating in a global multilevel marketing fraud scheme from May 2018 to March 2021 and recruiting Bitcoin users for MTI’s unregistered commodity pool. The regulator also claimed that MTI and Steynberg controlled the commodities pool and engaged in off-exchange retail forex trading using a proprietary “bot” or software program that they fraudulently claimed to be genuine.
During this time, Steynberg accepted at least 29,421 Bitcoin worth over $1,733,838,372 at the end of March 2021 from at least 23,000 people in the U.S. According to the court ruling, Steynberg misappropriated all the Bitcoin he received from the pool participants.
Steynberg accepted over $1.7 billion worth of Bitcoin from at least 23,000 people in the U.S. and more from other countries without proper registration. The court ruling indicated that Steynberg misappropriated all the Bitcoin he received from pool participants.
In its press release, the U.S. CFTC noted that recovering money lost due to fraud is not guaranteed. The regulator stated that it is committed to protecting customers and ensuring wrongdoers are held accountable for their actions.
In a separate case, the U.S. Commodity Futures Trading Commission (CFTC) responded to four legal briefs submitted on behalf of Ooki DAO, a decentralized autonomous organization (DAO) it accused of violating federal commodities laws by offering leveraged and margin crypto trading products to U.S. investors in September 2022.
Ooki DAO’s legal briefs had urged the judge to reconsider the decision allowing the CFTC to serve the DAO’s members notice of a lawsuit via a help bot on the website and a forum post rather than directly to members. The U.S. CFTC argued that this was the only way the DAO made itself available. The regulator pointed to a tweet from the DAO’s official Twitter account and a conversation between users in a DAO-run forum as evidence that the notice was adequate.
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