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Policy

South African Mirror Trading's CEO Fined $3.4B by U.S. in Bitcoin Forex Fraud Case

The founder of bitcoin pool operator MTI was charged with fraud last year for running an unlicensed commodity pool scheme.

By Sandali Handagama
AccessTimeIconApr 28, 2023 at 8:06 a.m. UTC
Updated Apr 28, 2023 at 2:20 p.m. UTC
(Jesse Hamilton/CoinDesk)
(Jesse Hamilton/CoinDesk)
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A U.S. court has ordered the head of bitcoin (BTC) pool operator Mirror Trading International (MTI) to pay $3.4 billion in restitution and penalties, the country's top commodities watchdog said in a Thursday statement.

The sum constitutes the highest civil monetary penalty ordered in any case brought by the the Commodities Futures Trading Commission (CFTC), the regulator said.

The CFTC charged South Africa-based Cornelius Johannes Steynberg with fraud in June 2022, alleging the "controlling person" at MTI accepted 29,421 BTC (valued at more than $1.7 billion at the time of acceptance) from 23,000 Americans for running an unlicensed commodity pool scheme.

MTI is undergoing liquidation in South Africa, according to the CFTC announcement, while Steynberg is a fugitive from South African law enforcement who has been detained in Brazil since December 2021.

The order finds MTI "liable for fraud in connection with retail foreign currency (forex) transactions, fraud by an associated person of a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations."

In addition to the multi-billion-dollar penalty, Steynberg is permanently prohibited from registering with the CFTC, and trading in any markets regulated by the watchdog.

Read more: CFTC Charges South African Bitcoin Club Mirror Trading International With $1.7B Fraud

Edited by Parikshit Mishra.

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Sandali Handagama
Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.

Follow @iamsandali on Twitter

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