It is believed that malicious actor fooled over 23,000 US citizens and even more people around the world.
In a groundbreaking verdict, a judge imposed a massive $3.4 billion penalty in a Bitcoin-related fraud lawsuit filed by the US Commodity Futures Trading Commission (CFTC).
This jaw-dropping fine was handed down by Texas District Court Judge Lee Yeakel, who presided over a case brought by the US financial regulator involving a deceitful scheme revolving around Bitcoin (BTC).
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Based on the CFTC press release, South African national Cornelius Johannes Steynberg created an intricate international fraudulent multilevel marketing scheme to lure Bitcoin from the public for participation in an unregistered commodity pool.
Steynberg held the position of CEO at Mirror Trading International Proprietary Limited (MTI), a company that claimed to offer trading and networking services. The court ordered him to pay a whopping $1.73 billion to compensate his victims and another $1.73 billion as a civil monetary penalty.
This unprecedented fine sets a new record as the "highest civil monetary penalty ordered in any CFTC case" and the "largest fraudulent scheme involving Bitcoin charged in any CFTC case."
Steynberg's fishy pool was valued at over $1.7 billion by March 2021. It appears that between May 2018 and March 2021, the malicious actor managed to steal at least 29,421 BTC, then valued at over $1.7 billion but now worth around $867 million, from roughly 23,000 individuals in the United States and even more on a global scale.
The CFTC's statement reveals that Steynberg misappropriated all of the received Bitcoin.
Either directly or indirectly, the defendants misappropriated all of the Bitcoin they accepted from pool participants.
The court order found him guilty of fraud in connection with retail foreign currency transactions, fraud by an associated person of a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations.
As a consequence, Steynberg has been permanently barred from engaging in any conduct that breaches the Commodity Exchange Act (CEA), registering with the CFTC, or trading in any CFTC-regulated markets.
It is worth noting that the CFTC filed a civil enforcement action against him in federal court on June 30, 2022, for fraud and registration violations.
The historic $3.4 billion verdict sends a clear message to those who dare to dabble in deceitful schemes, proving that justice will eventually catch up to them.
