The Court of the Western District of Texas (USA) ruled in the case of the founder and CEO of the cryptocurrency pyramid Mirror Trading International Proprietary Limited (MTI) Cornelius Johannes Steinberg.
Today, a federal court ordered a South African CEO to pay more than $3.4 billion for forex fraud, making this the CFTC’s largest fraud case involving bitcoin. Learn more: https://t.co/X2vmHIRLkh
— CFTC (@CFTC) April 27, 2023
According to the ruling, Steinberg will pay $1.7 billion in compensation to the victims and a similar amount in the form of a fine to the state. Its in CFTC called “the highest civil penalty imposed in a case involving the department”, and the incident itself – “the largest fraudulent crypto scheme discovered by the Commission.”
In June 2022, the regulator sued MTI. The department explained that Steinberg created an international “multi-level marketing scheme”, through which he received more than $ 1.7 billion.
The organization allegedly raised money from investors for over-the-counter retail foreign exchange trading using leveraged assets. However, instead, MTI misappropriated funds from at least 23,000 people by providing fake transaction information.
Steinberg was charged with multiple counts, including foreign exchange fraud, fraud as a commodity pool operator, and violation and non-compliance with registration rules.
He was put on the wanted list and arrested only in January 2022 in Brazil.
The court also permanently banned Steinberg from registering with the CFTC or trading on any regulated markets.
Recall that in April, law enforcement officers in New York arrested the former broker of banks JPMorgan and Deutsche Bank Rashawn Russell on suspicion of fraud with digital assets. According to investigators, he persuaded investors to invest in altcoins, while he himself spent their money on gambling and covering debts.
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