A US judge has ordered a South African executive to pay more than $3.4 billion in restitution and fines for a fraud scheme involving Bitcoin — the highest-ever civil monetary penalty in any US Commodity Futures Trading Commission case.
Cornelius Johannes Steynberg, the founder and chief executive officer of Mirror Trading International Proprietary, committed fraud tied to retail foreign-currency transactions, among other violations, the agency said in a statement that announced the order by US District Judge Lee Yeakel.
Between 2018 and 2021, Steynberg took part in a global “fraudulent multilevel marketing scheme” to solicit Bitcoin from people for participation in an unregistered commodity pool operated by Mirror Trading, according to the regulator.
He solicited at least 29,421 Bitcoin — worth more than $1.7 billion in March 2021 — from at least 23,000 individuals in the US and more from around the world, for participation in an unregistered commodity pool that his company operated.
“Either directly or indirectly, the defendants misappropriated all of the Bitcoin they accepted from pool participants,” CFTC said.
Though the agency slapped Steynberg with the fine, it cautioned that it “may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets.”
Steynberg, a fugitive from South African law enforcement, has been detained in Brazil on an Interpol arrest warrant since the end of 2021, the CFTC said. The regulator has permanently barred him from trading in any CFTC-regulated markets.
By Olga Kharif / Bloomberg