US files civil suit against MTI over Bitcoin scam

The US Commodity Futures Trading Commission (CFTC) has filed a civil action against Mirror Trading International (MTI) and its former CEO Johann Steynberg, charging them with fraud and registration violations. Moneyweb reports that the charge sheet says Steynberg ‘created and operated, through MTI, a global foreign currency commodity pool that only accepted Bitcoin to purchase a participation in the pool, with a value of over $1 733 838 372. This action is the largest fraudulent scheme involving Bitcoin charged in any CFTC case.’ MTI was rated the world’s biggest crypto scam of 2020, according to 2021 Crypto Crime Report by Chainalysis. MTI was placed in liquidation in December 2020 when investors were unable to withdraw funds from the scheme. Steynberg fled to Brazil around the same time, and was arrested late last year by police in that country. He is currently fighting extradition to SA. The CFTC says it is seeking full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act and CFTC Regulations.

Moneyweb says an interesting feature of the complaint is that both Steynberg and MTI are cited as respondents, which means the liquidators of MTI as trustees will have to respond to the case, opening up a new front in their long-running legal battles to recover missing Bitcoin. It has been speculated that this may also be a prelude to criminal charges being filed against Steynberg in the US, in which case a request for his extradition to the US may be forthcoming. This would pose an interesting two-way tussle between SA and the US for Steynberg. The liquidators brought a case in the Western Cape High Court to have MTI declared a Ponzi scheme, in which case all disbursements from the scheme would have to be repaid. The court has yet to issue its decision in that case. Steynberg and MTI deposited only 1 846.72 of participants’ 29 421 Bitcoin into the FXChoice Pool account, says the complaint.