HomeCryptocurrencyCFTC brings $1.7B fraud case involving Bitcoin against South African national

CFTC brings $1.7B fraud case involving Bitcoin against South African national

The US Commodity Futures Buying and selling Fee, or CFTC, has taken enforcement motion towards a South African nationwide in what the regulatory physique known as its “largest fraudulent scheme involving Bitcoin.”

In a Thursday announcement, the CFTC mentioned it had filed a civil enforcement motion in federal court docket for fraud and registration violations towards Cornelius Johannes Steynberg. The South African nationwide allegedly created and operated a worldwide international foreign money commodity pool totaling greater than $1.7 billion, solely permitting the members to pay utilizing Bitcoin (BTC).

The CFTC alleged that Steynberg used the South Africa-based agency Mirror Buying and selling Worldwide Proprietary Restricted to solicit BTC from the general public utilizing social media and varied web sites. From Might 2018 to March 2021, the regulatory physique claimed that he accepted no less than 29,421 BTC — valued at greater than $1.7 billion on the time, however roughly $564 million on the time of publication — together with from people in america.

“The defendants misappropriated, both immediately or not directly, all the Bitcoin they accepted from the pool members,” mentioned the CFTC. “The CFTC seeks full restitution to defrauded buyers, disgorgement of ill-gotten positive aspects, civil financial penalties, everlasting registration and buying and selling bans, and a everlasting injunction towards future violations of the Commodity Trade Act and CFTC Laws.”

Associated: The CFTC’s motion towards Gemini is unhealthy information for Bitcoin ETFs

The case towards Steynberg is the newest in a collection of enforcement actions the CFTC has taken towards people allegedly utilizing cryptocurrencies for illicit functions or digital asset companies for violations of the Commodity Trade Act. In June, the CFTC filed a lawsuit towards Gemini, claiming the crypto trade made false or deceptive statements to the regulatory physique in 2017. A federal court docket additionally ordered the founders of crypto derivatives trade BitMEX to pay $30 million in penalties as a part of the conclusion of a swimsuit filed by the CFTC in October 2020.