In a major victory, the US Commodity Futures Trading Commission (CFTC) has secured a $1.73 billion fine against the orchestrators of a fraudulent scheme it had uncovered. Over nearly three years, these fraudsters enticed unsuspecting investors into a complex “investment” program that incorporated elements of both FX and cryptocurrency. This marks the largest crypto scam shutdown in CFTC’s history, with the court compelling the scammers to pay a substantial penalty.
Mirror Trading International, a seemingly colossal global Ponzi scheme disguised as a trading company, now faces the hefty $1.73 billion fine. The US District Court for the Western District of Texas also decreed that the mastermind behind this scheme must pay the same amount in restitution to the victims. This verdict was announced in a press release by the US CFTC.
Judge David Ezra of the US District Court found Mirror Trading International liable for fraud related to retail foreign currency transactions, fraud perpetrated by a commodity pool operator (CPO), registration infringements, and failure to comply with CPO regulations. Currently, the platform is undergoing a liquidation process in South Africa. The order permanently prohibits Mirror Trading International from any further breaches of the Commodity Exchange Act. Additionally, it imposes enduring trading bans on any CFTC-regulated markets and a registration ban against Mirror Trading International.
CFTC’s Director of Enforcement, Ian McGinley, highlighted that this scam stands as the most substantial Bitcoin-based fraud ever uncovered by their organization. He explained that the settlement with Mirror Trading International and the default judgment against CEO Steynberg represent the latest development in their ongoing battle against fraudsters who targeted over 23,000 individuals in the US. These criminals made enticing promises of immense wealth through their purported ‘Advanced Intelligence Software with Bitcoin as the base currency,’ when, in reality, they were running a classic multilevel marketing scam.
However, CFTC acknowledged that this order might not lead to actual payouts for the victims, as the wrongdoers may not possess sufficient funds to cover both fines and restitution.
As per the order, from May 2018 to March 2021, the platform and its CEO, Cornelius Johannes Steynberg, invited individuals to participate in their global multilevel marketing scheme. Victims were instructed to send their Bitcoins (BTC) to a pool allegedly supported by Bitcoin-based advanced intelligence software capable of generating profits. Subsequently, these funds were traded on over-the-counter (OTC) desks. In total, the platform in question might be responsible for the disappearance of nearly 30,000 Bitcoins (BTC), as stated in the order.