Home - Bitcoin - Largest Bitcoin Fraud Scheme Results-Here’s Why

James Carter

April 29, 2023

Largest Bitcoin Fraud Scheme Results-Here’s Why

In a case of Bitcoin fraud that was brought by the United States Commodity Futures Trading Commission, a judge has awarded a record-breaking penalty of $3.4 billion.

Largest Bitcoin Fraud Scheme Results

Cornelius Johannes Steynberg, a South African national and the CEO of Mirror Trading International Proprietary Limited (MTI), has been ordered to pay the penalty for his role in a fraudulent commodity pool scheme that involved foreign currency transactions and Bitcoin, according to a press release issued by the CFTC on Thursday. Steynberg was ordered to pay the penalty for his role in the scheme.

People were encouraged to invest in Bitcoin so that they might become members of an unregistered commodities pool through the use of an international multilevel marketing approach that was part of the scheme.

Steynberg was given the mandate by Judge Lee Yeakel to make restitution in the amount of $1.73 billion as well as a civil monetary penalty in the same amount.

According to the Commodity Futures Trading Commission (CFTC), this is the “largest fraudulent scheme involving Bitcoin” that has ever been charged in a CFTC investigation and the “highest civil monetary penalty ordered in any CFTC case.”

Steynberg received a total of 29,421 BTC in donations from 23,000 individuals in the United States and other countries between May 2018 and March 2021. At the time, the value of the BTC stockpile was greater than $1.7 billion, but its value has since dropped to around $867 million.

The Commodity Futures Trading Commission (CFTC) made the discovery that Steynberg had stolen all of the Bitcoin that he had obtained from pool participants.

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The court has decided that Steynberg is responsible for the crimes of fraud in connection with retail foreign currency transactions, violations of registration requirements, fraud committed by an affiliated person of a commodity pool operator, and failure to comply with commodity pool operator (CPO) laws.

A permanent prohibition on Steynberg’s participation in any behavior that violates the Commodity Exchange Act has been imposed as a direct result of his connection with the act, which was mentioned before.

Additionally, he is prohibited from ever again registering with the CFTC or trading in any markets that are regulated by the CFTC.

On June 30, 2022, the Commodity Futures Trading Commission (CFTC) initiated a civil enforcement complaint against Steynberg in a federal court, charging him with fraud and registration violations.

In spite of the fact that the criminal managed to evade South African law enforcement, an INTERPOL arrest order has ensured that he has been detained in Brazil since December 2021. Steynberg has been found responsible and compelled to pay the record civil penalty despite the fact that he was not present throughout the proceedings of his case.

CFTC and the SEC Clampdown on Crypto Companies Amid Increasing Regulatory Scrutiny

Following the unprecedented failure of the cryptocurrency exchange FTX, two of the most powerful financial regulators in the United States, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), have begun an aggressive crackdown on the cryptocurrency industry.

Binance and its founder Changpeng “CZ” Zhao are being sued by the Commodity Futures Trading Commission (CFTC) over charges that the cryptocurrency exchange knowingly provided unregistered crypto derivative products in the United States in violation of the law. The suit was recently disclosed by the CFTC.

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In addition, the SEC has issued a “Wells notice” to the cryptocurrency exchange Coinbase, in which it warns the company that it may be subject to legal action in relation to certain of the digital assets it lists, as well as its staking program Coinbase Earn, Coinbase Prime, and Coinbase Wallet.

According to what has been reported, the worsening regulatory environment in the United States has forced Binance.US to back out of an agreement to purchase bankrupt cryptocurrency lender Voyager Digital for $1.3 billion.

In a statement released earlier this week, Binance.US stated that “the hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment that is impacting the entire American business community.”