The Commodity Futures Trading Commission (CFTC), a US government agency, has filed a civil enforcement action against now-defunct South African Bitcoin company Mirror Trading International (MTI), and its founder Cornelius Steynberg, for fraud and registration violations in a case involving over $1.7 billion (R27.8) billion.
In a statement, the CFTC alleges MTI operated a fraudulent scheme to solicit, accept and pool more than $1.7 billion to trade off-exchange, retail foreign currency (forex) on a leveraged, margined and/or financed basis.
It adds the defendants engaged in an international fraudulent multilevel marketing scheme via various websites, in addition to social media, to solicit Bitcoin from members of the public for participation in their pool.
At least 23 000 of the pool participants – most, if not all, of whom were not eligible contract participants – were from the US, it notes.
Mirror Trading was a South African crypto-currency website that promised huge returns.
The company grew in popularity because of its “too good to be true” returns. However, it collapsed in December 2020, leaving tens of thousands of investors without access to their funds.
When the site stopped trading, Steynberg reportedly fled South Africa for Brazil, where he hid out until he was arrested in December 2021 in a sting operation. He is currently awaiting an extradition hearing.
Instead of trading forex as represented, CFTS says the defendants misappropriated pool funds,…
