CFTC Accuses South African Bitcoin Club Mirror Trading International of Committing a $1.7b Fraud
- The regulator said that the CEO of MTI was recently arrested in Brazil according to an Interpol warrant.
- According to court documents, Steynberg is a wanted person across the world.
- His alleged scam lasted from May 2018 through the beginning of 2021, when MTI filed for bankruptcy and liquidation in South Africa.
The Commodity Futures Trading Commission (CFTC) has charged South African-based Bitcoin Club Mirror Trading International (MTI) with commodity fraud and misappropriation totaling $1.7 billion. According to the CFTC, MTI ran a “simulated” mining operation in which it promised investors high returns of up to 10% per month, while actually using new investor funds to pay existing investors.
The regulator also alleges that MTI’s self-described CEO, Johann Steynberg, was recently detained in Brazil on an Interpol warrant. If found guilty, MTI and its principals could face hefty fines and jail time. This case highlights the risks associated with investing in crypto assets, even when they are promoted by seemingly reputable organizations. Investors should always exercise caution and do their own research before committing any funds.
According to the CFTC, Steynberg’s scheme defrauded investors of over 29,000 BTC, making it one of the largest fraud cases involving bitcoin to date. Steynberg allegedly convinced victims that by investing their bitcoin with MTI, they would be participating in a high-tech investment club that would generate passive income with monthly returns of 10%.
Prosecution Filings
According to prosecution filings, which cited MTI’s comments, the victims of the scheme thought they were investing their bitcoin in a high-tech investment club “to develop your bitcoin.” According to Steynberg, MTI’s algorithms generated “passive income” with monthly returns of 10%. The materials said that there was a bonus for referring friends and relatives.
Those who recruited new members also received bonuses. In reality, however, there was no such investment club or algorithm generating returns. Instead, Steynberg simply used investor funds to pay back earlier investors and line his own pockets.
The regulator said that Steynberg did not give accurate disclosures, misled clients about their accounts, never successfully executed an FX swap, and lied about the presence of a “trading bot.”
According to court documents, Steynberg is a wanted person across the world. His domicile is in South Africa, however, the CFTC claims that he was “recently arrested” in Brazil due to an Interpol warrant.
Barry Pene is a stern blockchain research/copywriter. Barry has been trading cryptos since 2017 and has been invested in issues that would put the blockchain industry on the right pedestal. Barry's research expertise cuts across blockchain as a disruptive technology, DeFis, NFTs, Web3, and reduction of energy consumption levels of cryptocurrency mining.
