December 10, 2022

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CFTC files a lawsuit on fraud involving $1.7 billion Bitcoin

The US Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Mirror Trading International Proprietary Limited (MTI) and its CEO, Cornelius Johannes Steynberg. The lawsuit charges them with fraud and violating the registration process.

CFTC files a lawsuit involving Bitcoin fraud

The CFTC has accused Steynberg of engaging in a global multilevel marketing (MLM) scheme that raked in 29,421 BTC valued at more than $1.7 billion. The agency said that Steynberg used MTI to run this scheme.

According to the regulatory agency, the scheme was conducted from May 2018 to March 2021. The CFTC has filed the lawsuit at the US District Court for the Western District of Texas.

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Kristin Johnson, a commissioner of the CFTC, released a statement on this lawsuit saying, “The little trading that Defendants did was unprofitable, and they misappropriated essentially all of the at least 29,421 Bitcoin accepted from participants. Fraudsters often take full advantage of new technology, global connectivity, and perceived lack of a cop on the beat to perpetrate their scams.”

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CFTC’s role in regulating crypto

This is the latest move made by the CFTC to regulate the growing cryptocurrency sector. In May, the CFTC said that it would add more resources to monitor the crypto space to ensure it abides with the provided laws.

Earlier this month, the regulatory agency filed a lawsuit against the Gemini cryptocurrency exchange. The charges claimed that Gemini misled regulators in 2017. The CFTC further added that the exchange made falsified statements to receive approval for a Bitcoin futures product.

The US government has also been cracking down on wrongdoings in the cryptocurrency space. Recently, the US Department of Justice filed charges against four rug pulls in the non-fungible token (NFT) sector. The DoJ said these schemes could have defrauded the victims more than $100 million.

Steynberg is a citizen of South Africa, and the CFTC is not the first agency going against him. He was recently arrested in Brazil under an INTERPOL arrest warrant for evading authorities in South Africa. The CFTC has said that it wants restitution for the investors who lost their money.

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