The Commodity Futures Trading Commission (CFTC) has taken action against Cornelius Johannes Steynberg of Stellenbosch, Western Cape, Republic of South Africa and Mirror Trading International Proprietary Limited (MTI), a company organized and operated under the laws of the Republic of South Africa. The CFTC charged the defendants with fraud and registration violations.

According to the CFTC complaint, filed in the U.S. District Court for the Western District of Texas on June 30, 2022, 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.

The complaint charges that from approximately May 18, 2018 through approximately March 30, 2021, Steynberg, individually and as the controlling person of MTI, engaged in an international fraudulent multilevel marketing scheme, using the websites www.mirrortradinginternational.au.za, www.mtimembers.com, and www.mymticlub.com, in addition to social media, to solicit Bitcoin from members of the public for participation in a commodity pool operated by MTI.

The commodity pool was controlled by MTI and Steynberg and purportedly traded off-exchange, retail foreign currency on a leveraged, margined and/or financed basis with participants who were not eligible contract participants (ECPs) through what the defendants falsely claimed was a proprietary “bot” or software program.

During this period, Steynberg, individually, and as the principal and agent of MTI, accepted at least 29,421 Bitcoin—with a value of over $1,733,838,372 at the end of the period—from approximately 23,000 non-ECPs from the United States, and even more throughout the world, to participate in the commodity pool without being registered as a commodity pool operator as required. The defendants misappropriated, either directly or indirectly, all of the Bitcoin they accepted from the pool participants.

Steynberg is a fugitive from South African law enforcement, but was recently detained in the Federative Republic of Brazil (Brazil) on an INTERPOL arrest warrant.

In its continuing litigation, the 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.