In Texas, a district court judge issued a landmark verdict finding Cornelius Steynberg guilty of running a Ponzi scheme. The South African CEO of Mirror Trading International, Poenzi’s scheme, bilked investors out of huge amounts of bitcoin. But now that the case has finally been settled in court, Steynberg will face a record fine for cryptocurrencies, with the convicted entrepreneur now ordered to pay back a total of $3.4 billion.
Record fine in cryptocurrency history
On April 27, a historic court decision was issued by the District Court of Texas. The main prosecutor in the case was the American Commodity Futures Trading Commission (CFTC). As it reported, Steynberg managed to prove the conduct of illegal activities on the basis of a financial pyramid. The criminal defrauded many investors, mainly from the forex and bitcoin markets.
As a result of his scheme, 29,421 bitcoins were obtained, worth $1.7 billion (as of March 2021). Steynberg convinced and defrauded as many as 23,000 investors from around the world to participate in the scheme. The CFTC reported that the entrepreneur then misappropriated the investors’ assets.
In late 2021, he was detained by Brazilian law enforcement. He had previously been on the run from South African law enforcement following an Interpol arrest warrant. Now, after losing a lawsuit, he has been additionally banned from trading for life. This applies to financial sectors regulated by the CFTC.
Steynberg’s company, Mirror Trading International Proprietary, acted as a custodian of funds contained in a pool of bitcoin-based investments. The platform allegedly used algorithms to manage special trading bots. In theory, investors would deposit their BTC into the pool and in return receive profits generated as a result of trading these assets on various exchanges. As investigators managed to establish, no algorithms were ever implemented into the platform’s systems. The invested funds actually went straight to the private wallet of Steynberg and his associates. They, in turn, used these funds to buy such luxury goods as real estate, cars, and expensive jewelry.
Now, however, the creator of the financial pyramid must pay a total of $1.73 billion in compensation to injured investors. Additionally, a civil monetary penalty of $1.73 billion was imposed on him. This brings the total to $3.4 billion and is the largest monetary penalty imposed by a judicial body in the history of cryptocurrencies.
