The CFTC might have caught the “biggest fish” in the ocean. And there could be more out there.
The U.S. commodities watchdog announced Friday that it had lodged a civil suit against a South African CEO and his company for operating a bogus commodity pool worth more than $1.7 billion in bitcoin.
The Commodity Futures Trading Commission has filed a case against Cornelius Johannes Steynberg and Mirror Trading International Proprietary Ltd, claiming that the global multilevel marketing operation “misappropriated” all of the bitcoin it accumulated.
Suggested Reading | Meta Drops The Axe On Its Digital Wallet Novi
Biggest Fraud Investigation For CFTC
The CFTC stated that the scam, in which the company solicited bitcoin online from thousands of individuals to ostensibly operate a commodity pool, was the largest fraud involving Bitcoin it has ever investigated.
Steynberg, MTI’s key figure, took 29,421 BTC worth over $1.7 billion from 23,000 Americans “and even more globally” for an unlicensed commodity pool operation, the CFTC said.
CFTC claims that MTI operated for approximately three years between May 18, 2018 and March 30, 2021.
In a press statement, CFTC Commissioner Kristin Johnson, said:
“The defendants’ little trading activity was unproductive, and they misappropriated nearly all of the at least 29,421 Bitcoin collected from participants.”
According to Johnson, con artists frequently exploit new technologies, worldwide connectedness, and the “perceived absence of a police officer on the beat” to perpetrate their nefarious activities.
MTI’s claims are included in CFTC’s complaint documents as evidence that victims of the deception believed they were investing in a high-tech investment club.
According to Steynberg, MTI’s algorithms generate “passive income” with a 10% monthly return on investment (ROI). Based on the documentation, referring friends and family earned a bonus.
BTC total market cap at $364 billion on the weekend chart | Source: TradingView.com
CEO Is A Wanted Man
Sternberg is wanted by South African authorities, but he was recently arrested in the Federative Republic of Brazil on an Interpol arrest warrant, the CFTC disclosed.
South African authorities initiated a fraud inquiry after MTI filed for bankruptcy last year.
The charges brought against Steynberg and MTI are the most recent moves carried out by the agency, which stated in May that it was allocating additional resources to keep a closer eye on the cryptocurrency sector.
Suggested Reading | Bitcoin Legalization Pushed By Mexican Senator, Despite Central Bank’s Opposition
The CFTC filed a lawsuit against Gemini Trust Company earlier this month for allegedly deceiving authorities in 2017.
To obtain approval for its Bitcoin futures product, the cryptocurrency exchange, according to the CFTC, made “materially false or misleading claims.”
Meanwhile, CFTC’s action demands full recompense for misled participants, disgorgement, civil monetary penalties, permanent trading and registration prohibitions, among other penalties.
Featured image from Coincu News, chart from TradingView.com