The U.S. Commodity Futures Trading Commission (CFTC) announced that it secured an order of default judgment and permanent injunction against Cornelius Johannes Steynberg, a South African citizen. For operating a fraudulent Bitcoin-based forex trading scheme, Steynberg has to pay $1,733,838,372 in restitution to defrauded victims and a $1,733,838,372 civil monetary penalty. This is the highest civil monetary penalty ordered in any CFTC case.
The order finds that Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited (MTI), a company currently in liquidation in the Republic of South Africa, is liable for fraud in connection with retail forex transactions, fraud by an associated person of a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations.
Sternberg is a fugitive from South African law enforcement but has been detained in the Federative Republic of Brazil on an INTERPOL arrest warrant since December 2021.
From approximately May 2018 through March 2021, Cornelius Johannes Steynberg, individually and as the controlling person of MTI, engaged in an international fraudulent multilevel marketing scheme to solicit Bitcoin from members of the public for participation in an unregistered commodity pool MTI operated.
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.
