Key Takeaways
- CFTC claims that over a period of three years, Steynberg accepted over 29,000 Bitcoins from at least 23,000 individuals globally without being registered as a CPO as required.
- The $1.7 Bln Steynberg is ordered to pay is the highest civil monetary penalty in any CFTC case to date.
Cornelius Johannes Steynberg, founder and CEO of Mirror Trading International Proprietary Limited (MTI), has been ordered by the U.S. Commodity Futures Trading Commission (CFTC) to pay 3.4 Bln combined in civil monetary penalty and restitution to defrauded victims in the same amount.
The $1.7 Bln Steynberg is ordered to pay is the highest civil monetary penalty in any CFTC case to date. As per the official press release, the CFTC found Steynberg liable for fraud, registration violations, and failure to comply with CPO regulations in connection with a fraudulent multilevel marketing scheme involving Bitcoin.
The case involves Steynberg’s operation of an unregistered commodity pool and alleged trading off-exchange in retail forex through a proprietary “bot” or software program. Over a period of approximately three years, Steynberg allegedly accepted over 29,000 Bitcoins from at least 23,000 individuals globally without being registered as a CPO as required.
The CFTC alleges that Steynberg utilized his South Africa-based firm, Mirror Trading International Proprietary Limited, to solicit Bitcoin from the public through various social media platforms and websites. The regulatory body further claims that between May 2018 and March 2021, Steynberg accepted at least 29,421 BTC, which were worth more than $1.7 billion at the time.
“Either directly or indirectly, the defendants misappropriated all of the Bitcoin they accepted from pool participants. “CFtc press release reads.
Steynberg is currently a fugitive from South African law enforcement and has been detained in Brazil since December 2021 on an INTERPOL arrest warrant. It was in June 2022, CFTC announced that it had filed a civil enforcement action in federal court for fraud/registration violations against Steynberg.
The latest development comes amid CFTC’s increasing crackdown on platforms allegedly using cryptocurrencies for illicit purposes. Last year, crypto exchange Gemini was slapped with a lawsuit for making false or misleading statements to the regulatory body in 2017.
Earlier this year, CFTC sued the world’s largest crypto exchange Binance and founder Changpeng Zhao(CZ) on allegations the exchange knowingly offered unregistered crypto derivatives products in the U.S. against federal law.
