CFTC Cited $1.7B MLM In Biggest Fraud Scheme Involving BTC

CFTC cited $1.7M multi-level-marketing scheme as the biggest fraud scheme that involved Bitcoin, and the agency alleged Cornelius Steynbger used this scheme to launder over $29K in BTC so let’s read more today In our latest bitcoin news.

The Commodity Futures Trading Commission or the CFTC cited a huge MLM scheme involving bitcoin as it filed a lawsuit against Cornelius Johannes Steynberg and Mirror Trading International Proprietary Limited and charged them with fraud and other violations. The complaint accused Steynberg of engaging in a multilevel marketing scheme that brought in up to $1.7 billion in BTC. The agency said that Steynberg used his company MTI in the scheme which ran for three years. The civil action was deposited at the US District Court for the Western District of Texas. The CFTC commissioner Kristin Johnson said:

“The little trading that Defendants did was unprofitable, and they misappropriated essentially all of the at least 29,421 Bitcoin accepted from participants. Fraudsters often take full advantage of new technology, global connectivity, and perceived lack of a cop on the beat to perpetrate their scams.”

Statement of @CFTCjohnson Regarding the CFTC Charging South African Commodity Pool Operator and CEO with $1.7 Billion Fraud Involving Bitcoin. https://t.co/fKElfwQq5H

— CFTC (@CFTC) June 30, 2022

The charges against Steynberg and MTi were the latest actions taken by the CFTC that said it will be adding resources to monitor the market. Earlier this month, the CFTC filed a complaint against the Gemini Trust Company for misleading investors back in 2017. the CFTC said the exchange made false statements to gain approval for the BTC future product. Today’s announcement came after the day the US Department of Justice announced charges for four NFT rug pull cases that could have cost victims over $100 million.

Steynberg is a citizen of South Africa and was recently detained in Brazil on an INTERPOL arrest warrant after evading South African authoriteis. While the CFTC says it will be seeking full restitution to investors, the agency warned victims that the restitution orders might not result in the recovery of their lost funds.

As recently reported, CFTC commissioner Summer Mersinger believes that the CFTC gets closer to becoming the main overseer for crypto and the designation will expand the mandate of the regulator to pave the way for it and regulate digital assets like crypto and NFTs. Mersinger made the comments earlier this week at the Reuters Commodities Trading conference. From an industry perspective, the CFTC regulating crypto will be a better choice than the US SEC whose chair believes that they are securities and have to be regulated like stocks. He previously referred to stablecoins as casino poker chips.