US court orders the founder of the Mirror Trading Ponzi scheme to pay $3,4 billion

Half of the amount will go to compensate the victims, and the other half to pay the fine

28.04.2023 - 14:00

894

3 min

What’s new? On April 27, Judge Lee Yeakel of the US District Court for the Western District of Texas ruled in the case against Cornelius Johannes Steynberg, the founder of the crypto Ponzi scheme Mirror Trading. He was ordered to pay $1,73 billion in compensation to the platform’s customers, as well as a fine of a similar amount. The lawsuit was initiated by the Commodity Futures Trading Commission (CFTC) in June 2022. The penalty was the largest civil penalty ever imposed in a lawsuit brought by the regulator. The proceedings against Mirror Trading itself, however, are still pending.

The CFTC’s press release

Mirror Trading’s operations. The company was registered in South Africa, where it is currently going into liquidation, and operated around the world. Tens of thousands of people have been affected by its actions, users in the US alone have sent 29 421 BTC to the platform’s address.

Court documents indicate that from about May 2018 through March 2021, Steynberg participated in an international fraudulent, multi-level marketing scheme to solicit BTC from the public to participate in an unregistered commodity pool operated by Mirror Trading International Proprietary (MTI). MTI and Steynberg controlled the commodity pool and allegedly traded currencies using a proprietary bot. Directly or indirectly, the Ponzi scheme’s organizers embezzled all the bitcoins they accepted from pool participants.

Mirror Trading became the largest bitcoin fraud scheme in the CFTC’s practice. In addition to compensation and fines, Steynberg was permanently barred from registering with the CFTC and trading in any markets regulated by the agency.

Echoes of Silk Road. How the largest cryptocurrency confiscation in history took place

Who was behind the hack of the first illegal marketplace, and what happens to the seized cryptocurrencies

Read further

The commission noted, however, that compliance with the court order could be difficult if Steynberg did not have sufficient funds.

Steynberg was arrested in Brazil in January 2022, where he fled South Africa. The fraudster was discovered in the city of Goiânia, where he was living under false papers.

Author: