South African Ponzi Scheme MTI Fined $1.7bn, Ordered to Pay US Victims

Mirror Trading International (MTI), a bitcoin trading scheme, has been ordered to pay $1.7 billion (R32 billion) to its victims in the United States by a US Federal Judge. The legal documents describe MTI as an "international fraudulent multilevel marketing scheme" that transgressed a number of US laws.

The ruling was signed on behalf of MTI's liquidators in South Africa, who have been trying to trace thousands of missing bitcoin for the past two years. MTI ceased its operations in December 2020, which resulted in the scandalous disappearance of its founder and CEO, Johann Steynberg. Steynberg's whereabouts were later discovered in Brazil, where he was arrested based on an Interpol arrest warrant. The legal proceedings regarding his extradition are still underway.

The US Commodity Futures Trading Commission (CFTC) began investigating the South African-based company, recognizing it as a "multilevel marketing get-rich-quick scheme" in July of 2020. An additional court order issued in April of this year, requires Steynberg to pay a further $1.73 billion both in restitution to the victims who were defrauded and an equivalent amount as a civil monetary penalty. This insulation makes it the highest ever in a CFTC case.

CFTC Director of Enforcement, Ian McGinley, detailed how the fraudsters utilized the advanced intelligence software offering of MTI, promising a bitcoin-based wealth creation which morphed into a classic Ponzi scheme.

On the home ground, the Hawks are investigating MTI though no criminal charges have been filed. SA prosecutors have initiated an extradition request for Steynberg in April this year. A Brazilian court convicted Steynberg for utilizing a false passport. However, the question about the whereabouts of investors' funds remains unanswered as the search for missing bitcoin continues.