The Commodity Futures Trading Commission (CFTC) of the United States accused South African citizen Johannes Steinberg and Mirror Trading of running a fraudulent multi-level marketing scheme and lack of registration.
According to a lawsuit filed by the CFTC in the US District Court for the Western District of Texas, Johannes Steynberg and South African firm Mirror Trading International Proprietary Limited (MTI) orchestrated a fraudulent fundraising scheme. They have raised over $1.7 billion for over-the-counter retail trading of bitcoin and foreign currencies using leveraged funds and margin.
Defendants attracted people through various websites and social networks, at least 23,000 investors were from the United States. Given the lack of registration, Mirror Trading was not authorized to serve American citizens.
The CFTC alleges that instead of trading in foreign currencies, as claimed by the organizers of the project, the defendants misappropriated the pool funds, deliberately misrepresented the results of trading and submitted fake account statements. In addition, they created a fictitious broker through which trading was supposedly carried out. In fact, trading operations were carried out by the defendants, and they were unprofitable. As a result, Steinberg and Mirror Trading embezzled at least 29,421 BTC.
The agency requires that the defendants fully compensate for the losses of the defrauded depositors and pay a fine. The Commission seeks a permanent ban on the registration of such projects for the organizers of Mirror Trading. As the CFTC said, this scheme has become one of the biggest bitcoin scams, so law enforcement is committed to protecting Americans, no matter what the latest technology is used by scammers.
Recall that South African regulators uncovered the MTI cryptocurrency pyramid at the beginning of last year. In May, the liquidators of the project demanded that its creators pay $291 million to affected investors.