The U.S. Commodity Futures Trading Commission (CFTC) has ordered South African company Mirror Trading International (MTI) to pay $1.733 billion in restitution, marking the agency’s largest fraud scheme case involving digital assets. The court ruling in the Western District of Texas concludes an action initiated by the CFTC in June of last year. MTI, operating as a multi-level marketing scam, allegedly solicited investments from over 23,000 individuals, including 30,000 BTC from investors worldwide.
MTI promised guaranteed profits to investors, claiming they were generated through proprietary trading practices that never incurred losses. However, investigations revealed that the funds were not used for trading but were instead diverted to personal expenses of the company’s founder and other co-conspirators. The CFTC alleged that MTI’s founder, Johann Steynberg, misled investors about his expertise in forex and BTC trading and failed to disclose critical information about other executives, including their bankruptcy filings in the United States.
The CFTC’s Director of Enforcement, Ian McGinley, stated that the agency will continue to pursue individuals who exploit digital assets and emerging technologies for fraudulent activities. The case against MTI highlights the agency’s commitment to combating scams involving fictitious electronic trading bots and other deceptive practices.
South African authorities took action against MTI in 2020, placing the company into involuntary liquidation and appointing liquidators to oversee the bankruptcy proceedings before the High Court of South Africa. The proceedings are still ongoing.
Commissioner Kristin Johnson commended the CFTC’s collaboration with local and global regulators in cracking down on digital currency-related crimes. She urged investors to exercise vigilance, particularly when encountering fraudsters offering guaranteed or unusually high returns, emphasizing the need for additional scrutiny and diligence before transferring funds.