CFTC wins a record $3.4B penalty payment in a Bitcoin-related fraud case

Posted on

  • This is the largest bitcoin fraud case the CFTC has ever resolved.
  • The case involved the CEO of Mirror Trading International Proprietary Limited (MTI).
  • Half of the $3.4B will go to providing restitution to victims of MTI’s fraudulent activities.

A Texas court ordered Johannes Steinberg, CEO of Mirror Trading International Proprietary Ltd. (MTI), has to pay a fine of $3.4 billion in a massive fraud case. Bitcoin,

According to CFTC allegations, Steinberg engaged in an international fraudulent multi-level marketing scheme (MLM) to solicit bitcoin from the public for an unregistered commodity pool operated by MTI, a South Africa-based company.

Steinberg who was controlling MTI and the company falsely claimed to have conducted off-exchange retail forex trading via a proprietary “bot” or software program between May 2018 and approximately March 2021.

The final judgment read:

“Either directly or indirectly, the defendants misappropriated all bitcoins accepted from pool participants.”

According to the CFTC, Steinberg, personally and as principal and agent of MTI, accepted at least 29,421 bitcoins, worth more than $1.7 billion at the time. The bitcoins were received from at least 23,000 individuals in the US and other countries around the world. Individuals were tricked into participating in the commodity pool, although MTI was not registered as a commodity pool operator (CPO), as required by law.

Steinberg’s arrest

Steinberg was arrested in December 2021 and has since been held in Brazil on an Interpol arrest warrant.

In addition to the recent allegations against him by the CFTC, Steinberg is also permanently banned from registering with the CFTC or trading in any CFTC-regulated markets.

Restoring victims of MTI

Half of the $3.4 billion fine will go to providing restitution to victims of MTI’s fraudulent activities. The other half is a civil penalty, the highest civil penalty awarded in any CFTC case.

The CFTC has acknowledged, however, that “orders requiring payment of funds to victims may not result in the recovery of lost funds because the wrongdoer may not have sufficient funds or assets.”

Leave a Reply

Your email address will not be published. Required fields are marked *