The Commodity Futures Trading Commission , a US government agency, has filed a civil enforcement action against now-defunct South African Bitcoin company Mirror Trading International , and its founder Cornelius Steynberg, for fraud and registration violations in a case involving over $1.7 billion billion.
At least 23 000 of the pool participants – most, if not all, of whom were not eligible contract participants – were from the US, it notes.The company grew in popularity because of its “too good to be true” returns. However, it collapsed in December 2020, leaving tens of thousands of investors without access to their funds.
The CFTC’s complaint seeks full restitution on behalf of defrauded participants, as well as disgorgement, civil monetary penalties, permanent trading and registration bans, and other relief. “The timing of this is interesting. It is historic, given that it is the commission’s largest fraud case to date dealing with Bitcoin,” comments Richard Gardner, CEO of Modulus, a US-based developer of trading and surveillance technology.
“This is a massive amount of money. It even dwarfs hacks which have registered nine-figure losses,” says Gardner.“That Steynberg was able to raise over $1.7 billion from more than 23 000 non-ECPs in America, as well as countless throughout the globe – all without being registered as a commodity pool operator – that’s significant.