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South African Company MTI Directed to Compensate $1.7 Billion in Cryptocurrency Fraud Case by CFTC
On September 7th, the US Commodity Futures Trading Commission (CFTC) revealed its decision regarding a case involving a South African company accused of Bitcoin fraud. The CFTC announced that a judge had issued a consent order against Mirror Trading International Proprietary Limited (MTI), holding the company accountable for various fraudulent activities. As part of this ruling, MTI is required to compensate the numerous victims affected by its deceptive practices.
MTI initially promoted trading intelligence software that allegedly utilized Bitcoin as its primary currency for investment opportunities. However, the CFTC investigation uncovered a different scenario. The company and its CEO, Cornelius Johannes Steynberg, were found to be operating a multi-level marketing scam. MTI solicited Bitcoin deposits from individuals in exchange for the chance to join an unlicensed commodity pool. Contrary to their claims, this pool did not employ a proprietary “bot” or software for trading, and the company and its operator either directly or indirectly misappropriated funds from the pool’s participants.
The CFTC reported that MTI convinced investors to contribute an astonishing total of 29,421 BTC, which was valued at over $1.7 billion at one point. The company managed to gather investments from 23,000 individuals in the United States and thousands more globally.
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The recent court ruling mandates MTI to pay more than $1.7 billion in restitution to investors deceived by its fraudulent activities. Additionally, the court order prohibits MTI from breaching the Commodity Exchange Act (CEA) and imposes restrictions on trading and registration for the firm in CFTC markets.
Importantly, a default judgment against Steynberg in April required him to pay over $1.7 billion in restitution along with a civil monetary penalty exceeding $1.7 billion. It remains uncertain whether MTI’s $1.7 billion liability will influence Steynberg’s penalties.
MTI is currently undergoing liquidation, and its website is no longer operational. Reports indicate that the company compensated its employees in Bitcoin, although the CFTC has not provided any additional details beyond allegations of misappropriated funds.
This case serves as a stark reminder of the regulatory oversight and consequences associated with fraudulent activities in the cryptocurrency sector, highlighting the necessity for caution and thorough investigation when considering investment opportunities in this evolving field.
The post South African Firm MTI Ordered to Pay $1.7 Billion in Crypto Fraud Case by CFTC appeared first on BitcoinWorld.
