Johann Steynberg, founder and CEO of Mirror Trading International (MTI), has been ordered by a U.S. Federal Court to pay more than $3.4 billion in penalty and restitution upon allegations of operation of a bitcoin Ponzi scheme. The court order, handed down by the Commodity Futures Trading Commission (CFTC), includes the largest civil monetary penalty of any CFTC case. This marks the largest fraudulent scheme involving bitcoin ever incurred by the U.S. regulator.

Steynberg based his company MTI in South Africa, where he capitalized on retail foreign currency (forex) transactions as well as fraud by an associated person of a commodity pool operator (CPO). This put him in violation of many regulations, and the court has taken action to hold him accountable for his misbehaviour.

Steynberg had been accused of fraud since December 2020 and he fled his home country of South Africa to a city in Brazil. With the help of the Brazilian police, he was finally apprehended and awaits extradition to either the U.S. or South Africa. The CFTC claimed that nearly 23,000 people in the U.S. had been fooled into investing in MTI, hoping to gain returns despite being unaware of the investigation and fraudulent activities of the company.

The sum of $3.4 billion is the first step in righting wrongs as the court's judgment not only requires a return of funds to the victim, but a civil monetary penalty inline with the magnitude of misdeeds. Despite the court’s attempt to offer restitution and prevent similar activities from happening in the future, it is likely that wrongdoers will not have sufficient funds or assets to make those payments.

The CFTC has come out strong to protect bitcoin investors from fraudulent activities and the court's decision is indicative of their dedication to the cause. As such, there is still hope that victims of Steynberg’s scheme will be able to receive a small remnant of the funds taken from them by MTI.



Other News from Today