Court orders Mirror Trading organiser to pay $3.4 billion

A U.S. court in the Western District of Texas issued its ruling in the case of Cornelius Johannes Steynberg, founder and CEO of the cryptocurrency pyramid Mirror Trading International Proprietary Limited (MTI).

Today, a federal court ordered a South African CEO to pay more than $3.4 billion for forex fraud, making this the CFTC’s largest fraud scheme case involving bitcoin. Learn more: https://t.co/X2vmHIRLkh

— CFTC (@CFTC) April 27, 2023

According to the order, Steynberg will pay $1.7 billion as restitution to victims and an equivalent amount as a fine to the state. It was described by the CFTC as “the agency’s highest civil penalty in an action involving the agency,” and the incident as “the largest fraudulent crypto scheme identified by the Commission.”

In June 2022 the regulator filed a lawsuit against MTI. The agency explained that Steynberg created an international “multi-level marketing scheme” through which he obtained more than $1.7 billion.

The organization allegedly attracted funds from investors for off-exchange retail foreign exchange trading using borrowed assets. However, instead MTI illegally embezzled funds from at least 23,000 people by providing false information about the operations.

Steynberg was charged with several counts, including currency fraud, fraud as a commodity pool operator, as well as violations of and non-compliance with registration rules.

He was sought and arrested only in January 2022 in Brazil.

The court also permanently barred Steynberg from registering with the CFTC or trading on any markets under the regulator’s oversight.

In April, New York law enforcement authorities arrested former JPMorgan and Deutsche Bank trader Rashon Russell on suspicion of digital asset fraud. Investigators say he persuaded investors to invest in altcoins, while he spent their money on gambling and paying off debts.