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United States Commodity Futures Trading Commission Orders MTI Founder to Pay $34 Million for Bitcoin Fraud

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On April 28th, the United States Commodity Futures Trading Commission (CFTC) issued a statement stating that Judge Lee Yeakel of the West District Court of Texas in the United Stat

United States Commodity Futures Trading Commission Orders MTI Founder to Pay $34 Million for Bitcoin Fraud

On April 28th, the United States Commodity Futures Trading Commission (CFTC) issued a statement stating that Judge Lee Yeakel of the West District Court of Texas in the United States issued a default judgment and permanent injunction against Cornelius Johannes Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited (MTI), a South African bitcoin pool operator, Require Steynberg to pay compensation of $17338372 and a civil fine of $17338372 to the victim of the scam, which is the highest civil fine in the CFTC case. This action is also the largest fraud plan involving Bitcoin in the CFTC case.

A US judge has ruled that the founder of MTI has paid over $3.4 billion in compensation and civil fines

Introduction

On April 28th, 2021, the United States Commodity Futures Trading Commission (CFTC) announced that Cornelius Johannes Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited (MTI), a South African Bitcoin pool operator, has been ordered to pay $34 million in damages and civil fines for orchestrating a massive Bitcoin fraud scheme. The default judgment and permanent injunction were handed down by Judge Lee Yeakel of the West District Court of Texas making it the highest civil fine ever ordered by the CFTC in a Bitcoin fraud case

What is Mirror Trading International (MTI)?

Mirror Trading International was an online trading platform that reportedly managed over 260,000 Bitcoin, worth approximately $15 billion at current prices. The platform allegedly promised to use artificial intelligence and machine learning algorithms to generate returns for its investors, but in reality, it was a pyramid scheme that only made money by recruiting new members and using new investment funds to pay earlier investors. The scheme reportedly attracted customers from around the world, including many US residents.

The CFTC’s investigation into MTI

According to the CFTC, MTI and its founder Cornelius Johannes Steynberg began soliciting Bitcoin investments as early as 2019 through a variety of social media platforms and other online forums. The scheme allegedly offered investors hefty returns of up to 10% per week, based on the supposed trading success of the platform’s automated trading algorithms.
The CFTC investigation revealed that MTI’s reported daily return was simply an arbitrary number created by Steynberg, which was not based on any actual trading or investment strategies. In reality, the vast majority of the funds deposited by investors were used to pay out earlier investors, and Steynberg and his associates took a significant amount of the money for themselves.

The consequences for Steynberg and MTI

Following the CFTC’s investigation, Judge Yeakel found that Steynberg had essentially created a “fraudulent, unregistered and unregulated pool” that had “defrauded investors” out of millions of dollars. The court found Steynberg guilty of violating the Commodity Exchange Act and CFTC regulations and ordered him to pay approximately $17.3 million in restitution to the victims of the fraud and another $17.3 million in civil penalties, marking the highest fine in a CFTC action involving Bitcoin thus far. Although the amount of funds that will eventually be collected is still uncertain, this ruling marks a significant step forward in the fight against cryptocurrency fraud never experienced hitherto.

Conclusion

The CFTC’s successful prosecution of Steynberg and MTI underscores the risks associated with unregulated investment vehicles, particularly those involving cryptocurrency. The case is also a warning to other companies and individuals that attempt to use the cryptocurrency market to defraud investors. It provides a clear and strong message that those who engage in such activities will be held responsible and accountable for their actions.

FAQs

Q1. What is MTI?

MTI stands for Mirror Trading International, which was an online trading platform that fooled investors by promising unrealistic returns on Bitcoin investments as high as 10% per week.

Q2. What was the CFTC’s investigation about?

The CFTC investigated MTI and its CEO, Cornelius Johannes Steynberg, for orchestrating a massive Bitcoin fraud scheme that defrauded investors out of millions of dollars.

Q3. What was the ruling by Judge Lee Yeakel of the West District Court of Texas?

Judge Yeakel found Steynberg guilty of violating the Commodity Exchange Act and CFTC regulations and ordered him to pay approximately $17.3 million in restitution to the victims of the fraud and another $17.3 million in civil penalties, marking the highest fine in a CFTC action involving Bitcoin thus far.

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