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A South African fugitive who ran an unregistered commodity pool to defraud unsuspecting victims of foreign exchange and bitcoin has been ordered to pay over $3 billion in restitution and civil monetary penalty.
The judgment marks the largest monetary penalty ever recorded in a CFTC fraud case involving bitcoin.
<h2 dir="ltr" id="cftc-8217-s-biggest-bitcoin-fraudulent-case">CFTC&#8217;s Biggest Bitcoin Fraudulent Case</h2>
A US judge in the District Court for the Western District of Texas ordered Cornelius Johannes Steynberg, a South African fugitive, to pay a penalty of $3.4 billion in a bitcoin fraud case, as stated in a <a href="https://www.cftc.gov/PressRoom/PressReleases/8696-23" data-wpel-link="external" target="_blank">press release</a> by the Commodity Futures Trading Commission (CFTC).
The CFTC stated that Steynberg, founder and CEO of South African company Mirror Trading International Proprietary Limited or MIT, operated a fraudulent multi-level marketing (MLM) business model between 2018 and 2021 to solicit bitcoin from individuals to participate in a commodity pool. However, the CEO and his company ran the commodity pool without registering as a commodity pool operator (CPO) with the CFTC.
As stated in the press release, Steynberg received 29,421 BTC from about 23,000 US individuals and more globally worth $1.7 billion in March 2021, with the CFTC stating that the CEO misappropriated the funds.
The recent court order by Judge Lee Yeakel is based on a complaint filed against the South African CEO in July 2022. Steynberg is to pay a penalty of over $3.4 billion shared equally.
While $1.73 billion will be for restitution to defrauded victims, the other $1.73 billion will be paid as a civil monetary penalty, which the CFTC describes as the &#8220;highest civil monetary penalty ordered in any CFTC case,&#8221; adding &#8220;this action is also the largest fraudulent scheme involving Bitcoin charged in any CFTC case.&#8221;
<h2 dir="ltr" id="banned-from-engaging-with-the-cftc">Banned From Engaging With the CFTC</h2>
Furthermore, the press release said the South African CEO &#8220;is permanently enjoined from engaging in conduct that violates the Commodity Exchange Act (CEA),&#8221; cannot register with the regulator, nor trade in any CFTC-regulated markets. Meanwhile, Steynberg, who was hiding from his country&#8217;s law enforcement, is under detention in Brazil following an INTERPOL arrest warrant since the end of 2021.
As previously <a href="https://cryptopotato.com/cftc-claims-crypto-assets-are-commodities-in-lawsuit-against-ex-deutsche-bank-investment-banker/" data-wpel-link="internal">reported</a> by CryptoPotato, the CFTC filed a lawsuit against an ex-Deutsche Bank Investment employee who set up a fraudulent crypto trading fund to collect bitcoin, ether, and fiat from investors.
The regulatory agency also <a href="https://cryptopotato.com/us-cftc-sues-binance-ceo-changpeng-zhao-bitcoin-plunges-by-1400-immediately/" data-wpel-link="internal">sued</a> crypto exchange giant Binance and its CEO, Changpeng Zhao, for soliciting US customers in contravention of federal laws.
The post <a href="https://cryptopotato.com/south-african-ceo-ordered-to-pay-a-record-3-4-billion-penalty-in-cftc-bitcoin-fraud-case/" rel="nofollow">South African CEO Ordered to Pay a Record $3.4 Billion Penalty in CFTC Bitcoin Fraud Case</a> appeared first on <a href="https://cryptopotato.com/" rel="nofollow">CryptoPotato</a>.

South African CEO Ordered to Pay a Record $3.4 Billion Penalty in CFTC Bitcoin Fraud Case

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