Largest CFTC Enforcement Action Ever Involving Bitcoin.
The Commodity Futures Trading Commission (CFTC) has announced its largest enforcement action regarding Bitcoin ever. According to the CFTC, charges have been filed in a case involving a South African individual, Cornelius Johannes Steynberg, and his organizations involving a $1.7 billion fraud. The CFTC reports that Sternberg is a fugitive from South African law enforcement, but was recently detained in the Federative Republic of Brazil (Brazil) on an INTERPOL arrest warrant.
The CFTC has filed a civil enforcement action in the U.S. District Court for the Western District of Texas, charging Steynberg of Stellenbosch, Western Cape, Republic of South Africa and Mirror Trading International Proprietary Limited (MTI), a company based in the Republic of South Africa, with fraud and registration violations.
The CFTC states that Steynberg created and operated a global foreign currency commodity pool that only accepted Bitcoin to purchase a participation in the pool, with a value of over $1,733,838,372.
The CFTC complaint claims that, from May 18, 2018 through approximately March 30, 2021, Steynberg engaged in an international fraudulent multilevel marketing scheme.
Steynberg allegedly traded off-exchange, retail foreign currency on a leveraged, margined, and/or financed basis with participants who were not eligible contract participants (ECPs) through what the defendants falsely claimed was a proprietary “bot” or software program.
During this period, Steynberg and his firm accepted at least 29,421 Bitcoin—with a value of over $1,733,838,372 at the end of the period—from approximately 23,000 non-ECPs from the United States, and more globally.