CFTC charges $1.7 billion Bitcoin scam, largest to date
Mirror Trading accepted at least 29,421 Bitcoin from approximately 23,000 investors from the United States and even more throughout the world.
The Commodity Futures Trading Commission has charged South Africa citizen Cornelius Johannes Steynberg, CEO of Mirror Trading International Proprietary Limited (MTI), with fraud and registration violations.
According to the financial watchdog, Cornelius Johannes Steynberg created and operated a global foreign currency commodity pool that only accepted Bitcoin to purchase a participation in the pool, with a value of over $1,733,838,372.
29,421 Bitcoin from 23,000 US investors
In the largest fraudulent scheme involving Bitcoin charged in any CFTC case, the regulator seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, and civil monetary penalties, although wrongdoers may not have sufficient funds or assets to pay back victims.
The fraud was executed from 2018 to 2021 as an international fraudulent multilevel marketing scheme to solicit Bitcoin from investors for a commodity pool operated by MTI that purportedly traded OTC foreign exchange with participants through a fake proprietary bot.
Cornelius Johannes Steynberg, through Mirror Trading, accepted at least 29,421 Bitcoin—with a value of over $1,733,838,372 at the end of the period—from approximately 23,000 investors from the United States and even more throughout the world.
The defendants misappropriated, either directly or indirectly, all of the Bitcoin they accepted from the pool participants.
Mirror Trading CEO caught in Brazil on INTERPOL warrant
Sternberg is a fugitive from South African law enforcement, but was recently detained in the Federative Republic of Brazil (Brazil) on an INTERPOL arrest warrant.
CFTC Commissioner Kristin Johnson commented: “Instead of trading forex as represented, Defendants misappropriated pool funds, misrepresented their trading and performance, provided fictitious account statements as well as created a fictitious broker at which trading purportedly took place, and in general operated the pool as a Ponzi scheme.
“As a matter of fact, the little trading that Defendants did was unprofitable, and they misappropriated essentially all of the at least 29,421 bitcoin accepted from participants.
“Fraudsters often take full advantage of new technology, global connectivity, and perceived lack of a cop on the beat to perpetrate their scams. This action demonstrates that the Division of the Enforcement (DOE) is committed to protecting Americans, regardless of the technology or borders involved.”
