The US Commodity Futures Trading Commission (CFTC) has taken action against a South African individual for what it calls the “largest fraudulent scheme involving Bitcoin.”
In an announcement on Thursday, the CFTC stated that it has initiated a civil enforcement action in federal court against Cornelius Johannes Steynberg for fraud and registration violations. Allegedly, Steynberg, a South African national, set up and managed a global foreign currency commodity pool worth over $1.7 billion, which only accepted payment in Bitcoin (BTC).
The CFTC claims that Steynberg utilized Mirror Trading International Proprietary Limited, a company based in South Africa, to lure BTC investments from the public through social media and various websites. Between May 2018 and March 2021, he allegedly received at least 29,421 BTC, valued at over $1.7 billion at the time but approximately $564 million at present, including funds from US residents.
According to the CFTC, “The defendants misappropriated, either directly or indirectly, all of the Bitcoin they accepted from the pool participants.” The CFTC is seeking full compensation for defrauded investors, recovery of unlawfully acquired profits, financial penalties, permanent bans on registration and trading, and a lasting injunction against violating the Commodity Exchange Act and CFTC Regulations.
ENFORCEMENT NEWS: CFTC Charges South African Pool Operator and CEO with $1.7 Billion Fraud Involving Bitcoin. https://t.co/cvNlksPznw
— CFTC (@CFTC) June 30, 2022
Related: The CFTC’s action against Gemini is bad news for Bitcoin ETFs
The case against Steynberg is the most recent in a series of enforcement actions taken by the CFTC against individuals suspected of misusing cryptocurrencies or digital asset companies for violating the Commodity Exchange Act. Previously, in June, the CFTC filed a lawsuit against Gemini, alleging that the crypto exchange provided false or misleading information to the regulatory body in 2017. Additionally, the founders of BitMEX, a crypto derivatives exchange, were ordered by a federal court to pay $30 million in penalties as part of a settlement of a CFTC lawsuit filed in October 2020.
Image Source: Hi my name is Jacco / Shutterstock
