A record-breaking $3.4 billion fine was imposed by a judge in a lawsuit brought by a United States financial regulator over a Bitcoin (BTC) fraudulent scheme.
An April 27 statement by the Commodity Futures Trading Commission (CFTC) said Texas District Court Judge Lee Yeakel ordered Cornelius Johannes Steynberg to award the sum for his role in running a fraudulent commodity pool program involving foreign exchange transactions and bitcoin pay.
Steynberg, a South African national and CEO of Mirror Trading International Proprietary Limited (MTI), an alleged trading and networking company, was sentenced to pay $1.73 billion in compensation to scammed victims and an additional $1.73 billion in fines to pay in US dollars.
The CFTC said it was the “highest civil fine imposed in a CFTC case” and also “the largest bitcoin fraudulent scheme indicted in a CFTC case.”
The order explained that Steynberg, as head of MTI, “was involved in an international fraudulent multi-level marketing scheme to solicit members of the public for Bitcoin to participate in an unregistered commodity pool” whose value as of March 2021 was more than 1, amounted to US$7 billion.
From May 2018 to March 2021, the CFTC claimed he accepted at least 29,421 BTC, then valued at more than $1.7 billion — but currently worth about $867 million — from 23,000 people in the US and even more worldwide.
“Either directly or indirectly, the defendants embezzled all bitcoins they accepted from pool participants,” the CFTC wrote.
Under the April 27 order, Steynberg was found liable for fraud related to retail foreign currency transactions, fraud by an affiliate of a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations.
In addition, Steynberg is permanently prohibited from any behavior that violates the Commodity Exchange Act (CEA). It is also permanently banned from registering with the CFTC or trading in CFTC-regulated markets.
Related: Former FTX executive Ryan Salame’s home raided by FBI: report
On June 30, 2022, the CFTC announced that it had filed a civil enforcement action in federal court alleging fraud and registry violations against Steynberg.
Steynberg initially fled South African law enforcement and is currently a fugitive but has been detained in Brazil on an INTERPOL warrant since December 2021.
Magazine: Bitcoin in Senegal: Why is this African country using BTC?
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.