The Commodity Futures Trading Commission (CFTC) announced on September 7 that the US District Court for the Western District of Texas has ordered defunct Mirror Trading International (MTI) to pay $1.7 billion in restitution to victims for operating a fraudulent scheme.
The CFTC noted that MTI and its CEO, Cornelius Steynberg, were involved in an “international multi-level marketing scheme” that accepted nearly 30,000 Bitcoins from at least 23,000 Americans.
According to the announcement, MTI and Steynberg pledged access to an unregistered commodity pool in exchange for BTC contributions that had never been made.
Instead, “virtually all of the funds were misappropriated by MTI,” the CFTC wrote, adding that the latest court order and restitution effectively conclude a case filed in June 2022.
As previously reported, MTI entered provisional liquidation in late 2020 after one of its directors allegedly fled the country with all Bitcoin entrusted to the company by investors.
MTI claimed to have over 260,000 members in 170 countries in January 2021, with investors losing approximately $1 billion at the time of liquidation. The MIT fraud is considered one of history’s largest digital asset Ponzi operations.
CFTC Commissioner Kristin Johnson wrote in the announcement, “I strongly encourage all members of the public to stay informed about the potential scams and abuses in digital asset markets by visiting our investor advisory page.”
She added that since June 2023, the CFTC has brought or resolved ten fraud cases involving digital assets or foreign exchange.
“I commend the Division of Enforcement for continuing to stay vigilant, and sending a strong message to the market that the Commission will do what is necessary to protect its markets from fraud.”
The news comes as CFTC Commissioner Caroline Pham advocates for a limited pilot program to address the regulation of cryptocurrencies in the United States.
The commissioner announced on September 7 that she intended to propose a pilot program for digital asset markets, asserting that the United States may soon need to “catch up” to crypto-friendly jurisdictions.
On the same day, another CFTC Commissioner, Summer Mersinger, expressed concern regarding enforcement actions pertaining to decentralized finance protocols.
Instead of relying predominantly on enforcement actions, the commissioner argued that the CFTC should engage with the public and stakeholders.
