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Commodity Futures Trading Commission (CFTC)The US accused South African citizen Johannes Steinberg and Mirror Trading of running a fraudulent multi-level marketing scheme and not registering.
According to a lawsuit filed by the CFTC in the U.S. District Courtof the Western District of Texas, Johannes Steynberg and the South African firm Mirror Trading International Proprietary Limited (MTI) orchestrated a fraudulent fundraising scheme. They have raised over $1.7 billion for over-the-counter retail trading of bitcoin and foreign currencies using leveraged funds and margin.
Defendants engaged people through variouswebsites and social media, at least 23,000 investors were from the US. Given the lack of registration, Mirror Trading was not authorized to serve American citizens.
The CFTC claims that instead of trading in foreigncurrencies, as was stated by the organizers of the project, the defendants misappropriated the funds of the pool, deliberately distorted information about the results of trading and submitted fake account statements. In addition, they created a fictitious broker through which trading was supposedly carried out. In fact, trading operations were carried out by the defendants, and they were unprofitable. As a result, Steinberg and Mirror Trading embezzled at least 29,421 BTC.
The Office requires that defendants fullycompensated for the losses of defrauded depositors and paid a fine. The Commission seeks a permanent ban on the registration of such projects for the organizers of Mirror Trading. As the CFTC said, this scheme has become one of the biggest bitcoin scams, so law enforcement agencies are keen to protect Americans, no matter what the latest technology is used by scammers.
Recall that South African regulators uncovered the MTI cryptocurrency pyramid at the beginning of last year. In May, the liquidators of the project demanded that its creators pay $291 million to affected investors.