United States’ top regulator, the Commodity Futures Trading Commission (CFTC) has charged South African Bitcoin pool operator MTI with a $1.7 billion fraud.
‘MTI Operated Without License’ — CFTC
According to CFTC, Mirror Trading International – which paraded itself as a Bitcoin pool operator, was in fact a fraud scheme all along. The scheme began sometime in May 2018 and ended in early 2021 when MTI filed for bankruptcy in South Africa. However, the firm was already feeling the heat of regulation on all fronts (home and abroad) at that time.
The CFTC also claims that the brain behind the scheme is Cornelius Johannes Steynberg. And throughout MTI’s operation, Steynberg and his team amassed no less than 29,421 BTC from 23,000 Americans. In fact, that figure does not represent the entire amount in Bitcoin that the firm made away with. More BTCs were collected from all over the world for a commodity pool scheme the firm was not licensed to run.
CEO Arrested and Detained
Meanwhile, Steynberg himself has been on the run according to court filings. He has been on an international wanted list for a while. However, he was recently caught in Brazil and has been detained on an Interpol warrant.
Court documents show that Steynberg, whose residence is in South Africa, may have lied about his business model from the onset. To the victims of the charade, he portrayed a high-tech investment club which returned very high earnings.
Furthermore, MTI and Steynberg allegedly lied about the platform’s algorithms being created in a way that guarantees a 10% monthly “passive income” for the unsuspecting victims. Referrals were also said to yield interesting bonuses according to the court documents.
But as it turns out, none of the promises was true, says CFTC. Steynberg never made any profitable forex trades, and only put up fake account statements to keep up with the lie.
The watchdog confirms that MTI has misappropriated all the Bitcoin it received during the course of its operations.