CFTC wins record $3.4M penalty payout in Bitcoin related fraud case
The CFTC said it was the largest fraudulent Bitcoin scheme charged in all of its cases and “the highest civil financial penalty ordered in the CFTC case. ”
A record-breaking $3.4 billion penalty has been handed down by a Judge in an action filed by the United States fiscal watchdog involving a fraudulent scheme involving Bitcoin
The BTC ticker fell $29,423.
An April 27 statement from the Commodity Futures Trading Commission said Texas District Court Judge Lee Yeakel ordered Cornelius Johannes Steynberg to pay an amount for his part in negotiating a fraudulent commodity pool scheme involving foreign currency and Bitcoin deals.
Steynberg, a South African public and CEO of Mirror Trading International Proprietary Limited (MTI), a recognized trading and networking company, was ordered to pay $1.73 billion in damages to victims who were conned and a new $1.73 billion civil financial fine.
The CFTC said it was “the most high-level civil finance penalty ordered in any CFTC case” and also “the largest fraudulent scheme involving Bitcoin charged in any CFTC case.”
The order explains that as head of MTI, Steynberg “engaged in a fraudulent transnational multilevel marketing scheme to solicit Bitcoin from members of the public for participation in an unlisted commodity pool,” which was valued at over $1.7 billion as of March 2021.
From May 2018 to March 2021, the CFTC claims, he received at least 29,421 BTC worth more than $1.7 billion at the time, but is currently worth around $867 million — from 23,000 individuals in the US. and indeed more encyclopedic.
“Whether directly or sideways, the defendants increased all the Bitcoin they received from pool actors,” the CFTC wrote.
According to the April 27 injunction, Steynberg was held liable for fraud in connection with retail foreign currency transactions, fraud by related persons from commodity driver pools (CPO), violations of registration and failure to misbehave with CPO regulations.
also, Steynberg is permanently barred from engaging in behavior that violates the Commodity Exchange Act (CEA). He is also permanently barred from registering with the CFTC or trading any requests regulated by the CFTC.
On June 30, 2022, the CFTC stated that it had filed a civil enforcement action in civil 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 INTERPOL arrest leave since December 2021.
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