A record $3.4 billion fine has been handed down by a judge in a lawsuit brought by a US financial regulator over a fraudulent scheme involving Bitcoin (BTC).
April 27 statement of the Commodity Futures Trading Commission (CFTC) said Texas District Court Judge Lee Yeakel ordered Cornelius Johannes Steynberg to pay the sum for his role in perpetuating a fraudulent commodity pooling scheme. products involving foreign currency and bitcoin transactions.
Steynberg, a South African national and CEO of Mirror Trading International Proprietary Limited (MTI), an alleged trading and networking company, was ordered to pay $1.73 billion in restitution to the defrauded victims and an additional civil fine of $1.73 billion.
The CFTC said it was “the highest civil monetary penalty ordered in a CFTC case” and also “the largest fraudulent scheme involving Bitcoin charged in a CFTC case.”
Today, a federal court ordered a South African CEO to pay over $3.4 billion for forex fraud, making it the CFTC’s biggest fraud scheme case involving bitcoin. Learn more: https://t.co/X2vmHIRLkh
— CFTC (@CFTC) April 27, 2023
The order explained that as head of MTI, Steynberg “engaged in an international multi-level marketing fraud scheme to solicit Bitcoin from members of the public to participate in an unregistered product pool,” including the value totaled over $1.7 billion as of March 2021.
From May 2018 to March 2021, the CFTC claims he accepted at least 29,421 BTC valued at more than $1.7 billion at the time – but is currently worth around $867 million – from 23,000 people in the United States and even more around the world.
“Either directly or indirectly, the defendants misappropriated all of the Bitcoin they accepted from pool participants,” the CFTC wrote.
According to April 27 orderSteynberg was found liable for fraud in retail foreign currency transactions, fraud by a person associated with a commodity pool operator (CPO), registration violations and non-compliance with CPO regulations .
Additionally, Steynberg is prohibited from engaging in conduct that violates the Trade in Commodities Act (CEA). You are also permanently prohibited from registering with the CFTC or trading on CFTC-regulated markets.
On June 30, 2022, the CFTC announced that he filed a civil suit in federal court for fraud and registration violations against Steynberg.
Initially, Steynberg fled from South African law enforcement and is currently a fugitive, but has been held in Brazil on an INTERPOL arrest warrant since December 2021.