US Regulators Order Mirror Trading International (MTI) to Pay $1.7 Billion in Restitution for Massive Fraudulent Scheme Involving Digital Assets and Forex
Summary:
US regulators have ordered Mirror Trading International (MTI) to pay $1.7 billion in restitution to victims of its fraudulent scheme involving digital assets and forex. MTI and its CEO promised access to an unregistered commodity pool in exchange for Bitcoin contributions, but instead misappropriated the funds. This case concludes a June 2022 filing by the Commodity Futures Trading Commission (CFTC) and is one of the largest Ponzi schemes in digital asset history.
The enforcement case against Mirror Trading International (MTI), which collapsed, has finally seen progress as regulators in the United States take action. The United States District Court for the Western District of Texas has ordered MTI to compensate victims with a restitution payment of $1.7 billion. The fraudulent scheme operated by MTI involved digital assets and forex, as reported by the Commodity Futures Trading Commission (CFTC) on September 7th. The CFTC stated that MTI, along with its CEO Cornelius Steynberg, was involved in an international multi-level marketing scheme. They accepted approximately 30,000 Bitcoin from around 23,000 individuals in the United States, promising access to an unregistered commodity pool in exchange for BTC contributions that never materialized. Misappropriation of funds by MTI led to the court order and restitution being issued. This marks the conclusion of a case initiated by the CFTC in June 2022. MTI was placed under provisional liquidation in late 2020 after one of its directors allegedly fled with all the Bitcoin invested in the company. At the time of liquidation in January 2021, approximately $1 billion was lost by investors, making it one of the biggest Ponzi schemes involving digital assets. CFTC Commissioner Kristin Johnson urged the public to stay informed about potential scams in digital assets markets. Johnson also commended the Division of Enforcement for their efforts in protecting the market from fraud. The news coincides with CFTC Commissioner Caroline Pham's proposal for a limited pilot program to address cryptocurrency regulation, highlighting the need for the US to catch up to crypto-friendly jurisdictions. Commissioner Summer Mersinger also expressed concerns about enforcement actions related to decentralized finance protocols, suggesting greater engagement with the public and stakeholders.
Published At
9/8/2023 2:00:06 PM
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