South African Based Company Charged With Record $1.7B Bitcoin Fraud By CFTC
2022.07.02 04:40
South African Based Company Charged With Record $1.7B Bitcoin Fraud By CFTC
The U.S. commodities regulator CFTC announced on Thursday that it had filed civil charges against Cornelius Johannes Steynberg, CEO of South African-based company MTI, for operating a fraudulent commodity pool worth over $1.7 billion in bitcoin.
CFTC View On The Case
CFTC which stands for The Commodity Futures Trading Commission stated that the fraud scheme, in which the business solicited bitcoin online from thousands of people to manage a commodity pool reportedly, was the largest it has ever prosecuted concerning the cryptocurrency.
According to the CFTC’s complaint, MTI promised to have unique software to generate huge trading returns for investors who pooled their bitcoin with it, but no such “bot” existed.
CFTC added that MTI engaged in a scheme “to solicit accept, and pool more than $1.7 billion to trade off-exchange, retail foreign currency (forex) on a leveraged, margined, and financed basis.
It alleged that, rather than trading forex as MTI indicated, the corporation embezzled pool funds, misrepresented trade and performance, falsified account statements, and employed a bogus broker where the trading took place. According to the regulator, just a tiny portion of the 29,421 bitcoin invested.
Background On Company and Case
Defendants ran a worldwide fraudulent multilevel marketing enterprise, soliciting bitcoin from members of the public through numerous websites and social media platforms. “At least 23,000 of the pool members were from the United States, the majority, if not all, of whom were not qualified contract participants,” CTFC stated in a statement. The firm eventually declared bankruptcy in 2021, prompting South African authorities to begin a fraud inquiry.
According to the complaint, from May 18, 2018, to March 30, 2021, Steynberg, individually and as the principal and agent of MTI, accepted at least 29,421 Bitcoin—worth more than $1,733,838,372—to participate in the commodity pool without being registered as a commodity pool operator as required. The defendants stole all of the Bitcoin they took from pool participants directly or indirectly.
CFTCs Resolution
In its lawsuit, the CFTC seeks total compensation for misled participants, disgorgement, civil monetary penalties, permanent trading and registration prohibitions, and other relief.”
The CFTC warns victims that restitution orders may not result in monetary recovery because wrongdoers may lack adequate finances or assets.
Steynberg had been on the run from South African authorities but was recently apprehended in Brazil on an INTERPOL arrest warrant, according to the CFTC. Steynberg was unreachable for comment.
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