US court orders South African firm’s CEO to pay $3.4bn for bitcoin fraud
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A federal judge in Texas has ordered the head of a South African firm to pay a whopping $3.4bn (R62.35bn) for what the US commodities regulator said was its largest ever fraud case involving bitcoin.
Cornelius Johannes Steynberg was ordered to pay $1.7bn in restitution to victims of the scheme and another $1.7bn as a civil penalty, a record for any Commodity Futures Trading Commission (CFTC) case, the regulator said.
Steynberg, whose last known residence was in South Africa, could not immediately be reached for comment.
The CFTC charged Steynberg in July, saying Mirror Trading solicited bitcoin online from thousands of people to purportedly operate a commodity pool. The firm claimed to trade off-exchange, retail foreign currency with participants who were not eligible to trade, the regulator said.
From May 2018 to March 2021, Steynberg accepted and misappropriated at least 29,421 bitcoin — valued at more than $1.7bn — from about 23,000 participants from the US, including more than 1,300 in Texas, the CFTC said.
The default judgment against Steynberg was granted by judge Lee Yeakel in the Western District of Texas, according to a court filing.
Reuters