US federal court has ordered South African CEO Cornelius Johannes Steynberg to pay a total of $3.4 billion in a $1.7 billion retail forex and commodity pool fraud case. The fine includes $1.7 billion in restitution payment to defrauded investors and another $1.7 billion in civil monetary penalty.
The Commodity Futures Trading Commission (CFTC) highlighted in its Thursday announcement that this is the highest civil monetary penalty it has issued and that its also the largest fraud scheme involving Bitcoin.
The US District Court for the Western District of Texas issued its ruling in line with the civil enforcement action filed by the US derivatives markets regulator in July 2022 against Steynberg. He was found guilty of operating an unregistered commodity pool between May 2018 and March 2021, which resulted in fraudulent activity that affected at least 23,000 individuals in the US and other investors across the globe.
As per the regulator’s statement, Steynberg, the CEO of Mirror Trading International Proprietary Limited (MTI) allegedly used Bitcoin (BTC) payment to lure investors into the commodity pool, as per the regulator’s statement. Despite this, MTI, which was founded and headed by Steynberg, has failed to register itself as a commodity pool operator (CPO) and comply with the corresponding regulations.
The derivatives watchdog also described Steynberg’s operation as an “international fraudulent multilevel marketing scheme.”
The CFTC said:
MTI and Stynberg controlled the commodity pool and purportedly traded off-exchange, retail forex through what they falsely claimed was a proprietary “bot” or software program. During this period, Steynberg, individually and as the principal and agent of MTI, accepted at least 29,421 Bitcoin—with a value of over $1,733,838,372 at the end of March 2021—from at least 23,000 individuals in the U.S., and even more throughout the world, to participate in the commodity pool without being registered as a CPO as required. Either directly or indirectly, the defendants misappropriated all of the Bitcoin they accepted from pool participants.
The CFTC’s statement noted that Steynberg is currently a fugitive evading law enforcement in South Africa. However, he was apprehended in December 2021 after an Interpol arrest warrant was issued, and he has since been detained in Brazil, according to the regulator
