CFTC Accuses Man of Running World's Largest BTC Scam
The CFTC is accusing the man and a global community pool of running the world&39;s largest BTC scam which it detected, calling it "a years-long trick-operation that sought to defraud investors".
The U.S. federal regulatory agency, Commodity Futures Trading Commission (CFTC), charged a South African citizen and a global foreign currency commodity pool with fraud and registration violations worth nearly $2 billion in BTC.
Scammers made off with $1.7 billion in Bitcoin after they concocted an elaborate scheme.
The American regulator alleges that Steynberg, who was in control of MTI, took part in an international fraudulent multilevel marketing scheme between May 2018 and March 2021.
The CFTC's complaint states that the South African tried to get bitcoin from individuals via social media and other websites to participate in a commodity pool operated by MTI. The regulator pointed out, however, that investors were not eligible contract participants (ECPs).
Steynberg subsequently received a minimum of 29,421 BTC within the period, valued at over $1.73 billion at the time (now worth $598 million at bitcoin's current price). About 23,000 participants came from the United States alone. MTI, however, did not register with the CFTC.
“Instead of trading forex as represented, Defendants misappropriated pool funds, misrepresented their trading and performance, provided fictitious account statements as well as created a fictitious broker at which trading purportedly took place, and in general operated the pool as a Ponzi scheme.”
CFTC Seeks to Become Crypto's Top Regulator
Steynberg was recently arrested in Brazil on an INTERPOL warrant. He is still wanted by the South African police, however.
“CFTC seeks 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.”
The federal regulator warned that victims might not get their funds back, as the defendants may not have enough funds or assets for repayment.
The CFTC filed a case against two individuals who were accused of running a fraudulent scheme that swindled investors out of $44 million. The defendants also operated an unregistered commodity pool.
CryptoPotato recently reported that the CFTC is seeking to become the leading regulatory authority in the cryptocurrency sector.