In a landmark ruling, the Commodities Futures Trading Commission (CFTC) has secured a staggering amount in restitution of USD $1.7 billion from Mirror Trading International. The South African company was allegedly involved in a massive Forex fraud scheme.
The legal matter involves a complaint filed by the CFTC on June 30, 2022, which highlighted fraudulent activities, including deceiving retail investors through Forex transactions, violating registration requirements, and flaunting regulations governing commodity pool operators (CPOs).
CFTC Alleges Multilevel Fraud Scheme
According to the CFTC , MTI's Founder and CEO, Cornelius Johannes Steynberg, played a central role in orchestrating this elaborate scam. Steynberg, acting both individually and as MTI's company head, solicited Bitcoin from unsuspecting individuals. He allegedly enticed them to participate in an unregistered commodity pool supposedly operated by MTI.
"This settlement with MTI and default judgment against Steynberg represented the latest stage in our battle against fraudsters who victimized over 23,000 individuals from the US," said the Director of Enforcement at the CFTC, Ian McGinley.
"Here, the fraudsters made the most modern of promises, claiming their advanced intelligence software with Bitcoin as the base currency would create untold wealth for investors, but were actually committing a classic form of fraud, a multilevel marketing scam."
During the period the scams were conducted, Steyberg allegedly managed to accumulate a staggering 29,421 Bitcoins, equivalent to over USD $1.7 billion by the end of the scheme, from more than 23,000 US citizens and numerous others globally. According to a report by Finance Magnates, the perpetrators of this scheme systematically misappropriated all the Bitcoins entrusted to them by the pool participants.
Recovery Challenges and Fine of $3.4 Billion
In April, a court in Texas issued a staggering fine of USD $3.4 billion against Steynberg. As outlined in the court documents, Steynberg is mandated to pay USD $1.7 billion in restitution to victims who fell prey to the scheme's deception. The remaining USD $1.7 billion was levied as a civil penalty.
MTI, founded in April 2019, rapidly gained recognition as one of the world's fastest-growing cryptocurrency trading platforms, with a user base exceeding 260,000 individuals. The company attributed its success to a unique trading algorithm employing AI and machine learning for profitable trades on behalf of its users.
However, allegations of fraud and misconduct surfaced in late 2020, leading to MTI's provisional liquidation by a South African court in 2021. The penalty imposed against Steynberg marked the largest-ever civil monetary fine that the CFTC had imposed on any individual or company.
