The US Commodity Futures Trading Commission (CFTC) announced on September 7th that it has decided in a case involving a South African corporation accused of Bitcoin fraud. The Commodity Futures Trading Commission (CFTC) stated that a judge had issued a consent order against Mirror Trading International Proprietary Limited (MTI), holding the corporation liable for different forms of fraud. MTI is compelled to compensate the countless victims impacted by its fraudulent acts as part of this decision.
MTI initially advertised trading intelligence software that reportedly used Bitcoin as its foundation currency as an investment possibility. The CFTC inquiry, however, revealed a different reality. Instead, the company and its CEO, Cornelius Johannes Steynberg, were discovered to be running a multi-level marketing fraud. MTI solicited Bitcoin deposits from individuals in exchange for the opportunity to participate in an unlicensed commodity pool. Contrary to their promises, this pool did not use a proprietary “bot” or software program for trading, and the company and its operator either directly or indirectly plundered monies from the pool’s participants.
According to the CFTC, MTI persuaded investors to contribute an astonishing sum of 29,421 BTC, valued at over $1.7 billion at one point. The company was able to raise funding from 23,000 people in the United States and thousands more throughout the world.
The current court verdict requires MTI to pay more than $1.7 billion in restitution to investors duped by its fraudulent operations. Furthermore, the court judgment forbids MTI from violating the Commodity Exchange Act (CEA) and imposes a trading and registration restriction on the firm in CFTC markets.
Notably, a default judgment against Steynberg in April ordered him to pay over $1.7 billion restitution and a civil monetary penalty of over $1.7 billion. It is unclear whether MTI’s $1.7 billion debt will affect Stenberg’s consequences.
MTI is currently in liquidation, and its website is inactive. According to reports, the company paid its staff in Bitcoin, though the CFTC has not offered any other information beyond allegations of misused monies.
This case serves as a sharp reminder of the regulatory monitoring and penalties associated with fraudulent activity in cryptocurrency, emphasizing the importance of caution and due investigation when contemplating investment opportunities in this developing area.