Bitcoin fraud lands South African CEO with a staggering $3.5B fine

CFTC — Commodity Futures Trading Commission has fined a South African firm CEO, Cornelius Johannes Steynberg. The federal judge in Texas has ruled that the CEO must pay $3.4 billion, which is the highest civil monetary penalty ever ordered in any CFTC case. Furthermore, this ruling marks the largest fraudulent scheme involving Bitcoin charged in any CFTC case.

Steynberg heads Mirror Trading International Proprietary Limited (MTI), a company currently in liquidation in the Republic of South Africa, CFCT stated.

The court filing indicates the judgment and permanent injunction against Cornelius Johannes Steynberg of Stellenbosch, Western Cape, Republic of South Africa was granted by Judge Lee Yeakel in the District Court for the Western District of Texas.

According to the regulator, the CEO is to “pay $1,733,838,372 in restitution to defrauded victims and a $1,733,838,372 civil monetary penalty.”

Moreso, the order permanently enjoined Steynberg from engaging in conduct such as registering with the CFTC and trading in any CFTC-regulated markets.

According to the order, Steynberg “is 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.” 

Steynberg was filed by the CFTC June 30th, 2022 alleging that spanning from May 2018 to March 2021, Steynberg received and wrongfully used a minimum of 29,421 bitcoin from participants in a commodity pool, worth more than $1.7 billion at the time. The participants were approximately 23,000 U.S. individuals, with more than 1,300 of them being from Texas.

The CFTC also reported that Sternberg is currently a fugitive from South African law enforcement. However, they have recently detained him on an INTERPOL arrest warrant in the Federative Republic of Brazil as of December 2021.

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