The CFTC alleged that the company had proprietary software that was expected to recognize large trading wins for investors who contributed to the bitcoin pool, but in reality, no such “bot” was in use.
The head of a company in South Africa has been fined a whopping $3.4 billion by a federal judge in Texas. The US commodity regulator claimed that this was the largest ever fraud case involving Bitcoin by a company.
The chairman, who goes by the name of Cornelius Johannes Steinberg, was ordered to pay a $1.7 billion civil fine, the record for any commodity futures trading case, according to the regulator. Steinberg, whose last known place of residence was in South Africa, did not respond to the media.
Details of this bitcoin scam
CFTC had rebuke Steynberg in July, claiming that Mirror Trading requested Bitcoin online from thousands of people to run an alleged batch of goods. The company also promised to trade OTC and retail forex with users who were not allowed to trade. The CFTC has filed charges against Mirror Trading International Proprietary Limited.
Steinberg, who was a fugitive from South African law enforcement, was arrested in Brazil last year on an Interpol warrant.
Over a nearly three-year period from 2018 to 2021, Steynberg received and stole at least 29,421 bitcoins worth more than $1.7 billion from more than 23,000 U.S. participants. Texans were hardest hit by the robbery, which occurred nearly two years ago.
The verdict against Steinberg was introduced by Judge Lee Yekel in the Western District of Texas.
The CFTC alleged that the company had proprietary software that was expected to recognize large trading wins for investors who contributed to the bitcoin pool, but in reality, no such “bot” was in use. In fact, only a small part of the accumulated bitcoin has been invested, and that too at a loss. The rest was “misappropriated,” according to the CFTC. The company ended up filing for bankruptcy in 2021, and immediately after that a South African regulator launched its fraud investigation.
MTI is currently undergoing liquidation in South Africa. The order states that MTI is “liable for fraud in connection with retail foreign exchange (forex) transactions, fraud by a person associated with a commodity aggregator operator (CPO), registration violations, and failure to comply with CPO regulations.”
In addition to the fine, Steynberg is permanently banned from registering with the CFTC and trading in any markets regulated by it.
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Sanaa is a chemistry major and a Blockchain enthusiast. As a science student, her research skills enable her to understand the intricacies of financial markets. She believes that Blockchain technology has the potential to revolutionize every industry in the world.
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