Bitcoin Pool Operator Ordered to Pay $3.4 Billion Penalty
The head of Mirror Trading International (MTI), a bitcoin pool operator, has been ordered by a US court to pay a $3.4 billion penalty as restitution and penalty. The order follows allegations by the Commodities Futures Trading Commission (CFTC) that suspected fraud had taken place. South Africa-based Cornelius Johannes Steynberg, the “controlling person” at MTI was charged with defrauding 23,000 Americans out of 29,421 BTC. The sum was valued at more than $1.7 billion when it was accepted by Steynberg. According to the CFTC, Steynberg is a fugitive from the South African law and has been detained in Brazil since December 2021. MTI is undergoing liquidation in South Africa, the regulator said.
Highest Civil Monetary Penalty Ordered by CFTC
This penalty marks the highest civil monetary penalty in any case brought by the CFTC. The order also reveals that MTI is “liable for fraud in connection with retail foreign currency (forex) transactions, fraud by an associated person of a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations.” The order indicates that Steynberg is permanently prohibited from trading in any markets regulated by the CFTC and from registering with the CFTC.
Coin Desk noted that this decision by the CFTC demonstrated a strong commitment to protecting unsuspecting retail investors; regardless of the location of the individuals perpetuating such schemes.
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[h/t Sandali Handagama]