The U.S. commodities watchdog, Commodity Futures Trading Commission (CFTC), has charged South Africa-based Bitcoin (CRYPTO: BTC) operator Mirror Trading International (MTI) and Cornelius Johannes Steynberg for $1.7 billion of fraud and registration violations.
According to CFTC, MTI accepted 29,421 BTC worth $1.7 billion from 23,000 Americans for a commodity pool scheme that it wasn’t licensed to run. CFTC said this is the largest ever fraud scheme case involving Bitcoin.
The charging document said that the scheme’s victims were made to believe they were investing their Bitcoin in a high-tech investment club “to grow your Bitcoin.”
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The CFTC complaint said fraudulent activities occurred between May 18, 2018, and March 30, 2021. During that time, Steynberg’s MTI was running a multi-level marketing scheme. He used social media platforms and various websites to convince people to transfer their Bitcoin into a global foreign currency commodity pool.
However, the regulator said Steynberg failed to disclose the income adequately, lied about the existence of a “trading bot,” never made a good forex swap, and provided clients with phony account statements.
According to the CFTC, Steynberg himself is an international fugitive. His residence is in South Africa, but he has been detained in Brazil on an Interpol warrant.