The Commodities Futures Trading Commission on Thursday charged Mirror Trading International and the firm’s owner, Cornelius Steynberg, with fraud, claiming the company operated as a fraudulent multi-level marketing scheme that scammed billions from investors.
“This action is the largest fraudulent scheme involving Bitcoin charged in any CFTC case,” the commission said in a statement. Investors who pooled funds in the company, which was advertised as a bitcoin trading pool, lost a total 29,421 Bitcoin, a value of over $1.7 billion.
The firm, based in South Africa, advertised returns as high as 10% a month through investments manged by a trading “bot”. CFTC documents state that Mirror Trading invented account figures and created “a fictitious broker at which the trading purportedly took place.” Commissioner Kristin Johnson called the company a “Ponzi scheme” in a statement.
Cryptocurrency investors have dealt with a wave of scams and hacks this year. Earlier this month, the FTC reported that over 46,000 crypto owners were scammed in 2021, accumulating losses of over a billion dollars in bitcoin, ether, and other digital assets.
News of Steynberg’s fraud also came on the same day the FBI announced a $100,000 reward for “Cryptoqueen” Ruja Ignatova, who stole $4 billion from victims in another scam….
