CFTC Accuses Mirror Trading International Of $1.7 Billion Bitcoin Fraud

On June 30, 2022, the United States Commodity Futures Trading Commission (CFTC) filed a civil action in the United States District Court against Cornelius Johannes Steynberg and his firm Mirror Trading International (MTI) for conduct fraud and registration violations.

The CFTC alleges Steynberg launched and used MTI to operate a global foreign currency commodity pool worth more than $1.7 billion in Bitcoin (BTC).

To join the pool, users have to buy BTC, no other currencies are accepted to join. Notably, this is the largest fraud to date that the CFTC has alleged involving Bitcoin.

The complaint also highlights the fraudulent activity that allegedly occurred between May 18, 2018, and March 30, 2021, when Steynberg operated MTI as a Ponzi scheme. Steynberg used social media and many public websites to solicit BTC from members through a global pool of foreign currency commodities.

Commodity pool for the purpose of forex trading, retail foreign currency on a leveraged, margin basis with users who are not eligible contract participants (ECPs). The defendants allegedly perjured that the transaction was made through a proprietary trading “bot” or software program.

During this time, Steynberg was accused by the CFTC of accepting at least 29,421 BTC ($1.7 billion) to join the commodity pool from approximately 23,000 non-ECP users in the United States and even more found in other parts of the world. This was done even if the respondent was not registered as a commodity pool operator as required.

Steynberg is said to have done this both personally and on behalf of MTI. All BTC that the defendants took from pool members was illegally appropriated in some way, directly or indirectly.

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