Sep 08, 2023

CFTC Fines Mirror Trading $1.7B for Crypto Fraud

CFTC Fines Mirror Trading $1.7B for Crypto Fraud
CFTC fines Mirror Trading $1.7B for Bitcoin-related forex fraud

Mirror Trading International (MTI) Ordered to Pay Restitution to Victims

The United States District Court for the Western District of Texas has ordered Mirror Trading International (MTI) to pay $1.7 billion in restitution to victims of its fraudulent scheme involving digital assets and forex, the Commodity Futures Trading Commission (CFTC) announced on Sept. 7.

The CFTC noted that MTI and its CEO, Cornelius Steynberg, had been running an “international multi-level marketing scheme” that accepted nearly 30,000 Bitcoin (BTC) from at least 23,000 people in the United States. According to the announcement, MTI and Steynberg promised to provide access to an unregistered commodity pool in exchange for BTC contributions, which never took place.

“MTI misappropriated virtually all of the money instead,” the CFTC wrote, adding that the latest Harmony One Crypto court order and restitution effectively conclude a case that the authority filed in June 2022.

MTI Fraud and Digital Asset Regulation

As previously reported by Cointelegraph, MTI was put into provisional liquidation in late 2020 after one of its directors allegedly fled the country, taking with him all the Bitcoin that had been given to the company by investors. At the time of the liquidation, it was estimated that investors had lost around $1 billion, making it one of the biggest ever Ponzi schemes involving digital assets.

In January 2021, MTI reportedly had over 260,000 members in 170 countries. CFTC Commissioner Kristin Johnson has encouraged the public to stay informed of potential scams and abuses in the digital assets market, citing that the CFTC has brought or resolved ten fraud cases involving digital assets or forex since June 2023.

Commissioner Caroline Pham is advocating for a limited pilot program to address cryptocurrency regulation in the United States. She has proposed a pilot program for digital asset markets, arguing that the U.S. needs to “play catch-up” to crypto-friendly jurisdictions. This news comes as Voyager Crypto, Luna Crypto, and Harmony One Crypto are all making waves in the crypto world.

On the same day, Summer Mersinger, a CFTC Commissioner, also expressed her worries regarding enforcement actions related to decentralized finance protocols. She suggested that the CFTC should interact with the public and stakeholders instead of solely relying on enforcement actions.

Moreover, the commissioner emphasized the importance of crypto fraud prevention, Harmony One Crypto, Voyager Crypto, Luna Crypto, and the potential of Web 3.0, with its three integrated features, for marketing purposes.
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