AUSTIN, TX – A U.S. federal court has issued a massive default judgment against Cornelius Johannes Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited (MTI), for a sprawling Bitcoin fraud. Judge Lee Yeakel of the U.S. District Court for the Western District of Texas ordered Steynberg to pay $1,733,838,372 in restitution to victims and an equal amount as a civil monetary penalty – the highest ever levied by the Commodity Futures Trading Commission (CFTC).
The CFTC’s complaint, initially filed June 30, 2022, alleged that Steynberg orchestrated an international multi-level marketing scheme from approximately May 2018 through March 2021. He solicited Bitcoin from over 23,000 individuals in the U.S., and significantly more worldwide, promising participation in an unregistered commodity pool operated by MTI. Steynberg falsely claimed MTI used a proprietary “bot” to trade off-exchange retail forex.
Investigators found Steynberg and MTI accepted at least 29,421 Bitcoin – valued at over $1.73 billion as of March 2021 – without registering as a commodity pool operator as required by law. The CFTC determined that Steynberg misappropriated all of the Bitcoin received from investors. The scheme represents the largest fraudulent scheme involving Bitcoin ever brought by the CFTC.
Steynberg is currently a fugitive, wanted by South African authorities. He was detained in Brazil on an INTERPOL arrest warrant in December 2021 and remains there. Despite the judgment, the CFTC cautions that victims may not fully recover their losses, as the defendant may lack sufficient assets.
The court order permanently bans Steynberg from engaging in any conduct violating the Commodity Exchange Act, registering with the CFTC, and trading on CFTC-regulated markets. The CFTC’s litigation against MTI remains ongoing. The agency received assistance in the investigation from financial regulators in South Africa, Belize, Texas, Alabama, North Carolina, and Mississippi.
Source: CFTC.gov
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