Mirror Trading International to pay $1.7B in restitution to victims of Bitcoin investment scam
A judge found the company and its CEO liable for multiple types of fraud.
The U.S. Commodity Futures Trading Commission (CFTC) announced on Sept. 7 the outcome of a case against a South African company involved in crypto fraud.
The CFTC said that a judge has entered a consent order against Mirror Trading International Proprietary Limited (MTI), finding the company liable for several types of fraud. The order will also require the company to compensate its many victims.
According to the CFTC, MTI offered an investment opportunity in which it advertised trading intelligence software that used Bitcoin as a base currency.
However, according to the statement, the company and its CEO, Cornelius Johannes Steynberg, instead operated a multi-level marketing scheme. MTI solicited Bitcoin from investors and promised them the chance to participate in an unregistered commodity pool in return. Though that pool apparently existed, trading activity did not utilize a proprietary “bot” or software program, contrary to the company’s claims. Instead, the company and its leader misappropriated funds from pool participants either directly or indirectly.
The CFTC claims that MTI convinced investors to contribute a total of 29,421 BTC — an amount that at one point was worth more than $1.7 billion. The company accepted funds from 23,000 individuals in the U.S. and thousands more globally.
Victims will receive $1.7 billion in total
The latest court decision requires MTI to pay more than $1.7 billion in restitution to investors who its fraud has victimized. The court order enjoins MIT from violating the Commodity Exchange Act (CEA); it additionally bans the company from trading in CFTC markets and imposes a registration ban on the firm.
A default judgment against Steynberg in April required the executive to pay more than $1.7 billion in restitution plus a civil monetary penalty above $1.7 billion. It is unclear whether the $1.7 billion that MTI must pay affects Stenberg’s personal penalties.
MTI is currently in liquidation, and its website is not operational. Other descriptions of the company suggest that it paid its employees in Bitcoin, something that the CFTC did not comment on beyond allegations of misappropriated funds.