The Biggest Bitcoin-Related Fraud Scheme Worth $1.7 Billion: Here’s What You Need To Know

A federal regulatory agency, Commodity Futures Trading Commission (CFTC), has alleged a global foreign currency commodity pool and a South African citizen in fraud and registration violations worth around $2 billion in BTC.

A press release published on Thursday stated that the CFTC issued a civil enforcement action against Mirror Trading International Proprietary Limited (MTI) and Cornelius Johannes Steynberg before the U.S. District Court in the Western District of Texas.

The American regulator has claimed that Steynberg, who is in charge of MTI, was involved in an international fraudulent multilevel marketing scheme in the period between May 2018 and March 2021.

The South African requested the top cryptocurrency from individuals through social media and different websites to take part in a commodity pool in which MTI operates. Eligible contract participants(ECPs) are not allowed to be investors, said the regulator.

Within the above-mentioned period, Steynberg subsequently received a minimum of 29,421 BTC, valued at more than $1.73 billion at the time. As of today’s Bitcoin price, it is worth around $598 million. The United States alone accounts for around 23,000 participants. However, CFTC wasn’t registered by the MTI.

On the other hand, the regulator believes the case to be the largest fraudulent scheme that involves Bitcoin charged in any CFTC case. Kristin Johnson, CFTC Commissioner, in a separate press release said that defendants misappropriated pool funds instead of trading forex as represented and misrepresented their trading and performance. In addition, it provided fictitious account statements as well as created a fictitious broker at which trading occurred, and in general, ran the pool as a Ponzi scheme.

In other words, as of now, Steynberg is an exile from South African law enforcement but was captured recently on an INTERPOL arrest warrant in Brazil.

CFTC wants to give full restitution to civil monetary penalties, permanent registration, disgorgement of ill-gotten gains, trading bans, and defrauded investors, against future violations of the Commodity Exchange Act and CFTC Regulations, according to a statement from the press release.

The federal regulator giving warning to the victim said that there are chances that they would not receive their funds back as the defendant for repayment might not have enough funds or assets.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing