The U.S. Commodity Futures Trading Commission (CFTC) has charged Mirror Trading International Proprietary Limited (MTI) and its CEO, Cornelius Johannes Steinberg, with cryptocurrency fraud and registration violations.
The CFTC described the case as its “largest-ever fraud scheme case involving bitcoin,” alleging that MTI’s key figure, Steinberg, accepted 29,421 BTC from 23,000 Americans “and even more throughout the world” for a commodity pool scheme he wasn’t licensed to run.
Mirror Trading – an MLM scam?
The same complaint also details the alleged fraudulent activities while Steinberg ran Mirror Trading International as a multi-level marketing scheme between May 18, 2018, and March 30, 2021. Through the global foreign currency commodities pool, he solicited Bitcoin from members of the public through social media and several websites.
It is alleged that the commodities pool engaged in leveraged off-exchange retail foreign currency trading with users who consider themselves contract participants (ECPs) did not qualify. The defendants claimed that this trading was carried out using a proprietary trading “bot” or piece of software.
Cornelius Johannes Steinberg’s alleged lies
According to charging documents, victims of the scheme believed they were investing their Bitcoin in a high-tech investment club “to grow your bitcoin.” Instead, Steinberg allegedly claimed that MTI’s algorithms generated “passive income” with monthly returns of 10%. According to the records, referring friends and relatives resulted in a bonus.
Steinberg failed to provide necessary disclosures, never performed a lucrative currency swap, and presented clients with false account statements.
His alleged scam lasted from May 2018 until early 2021, when MTI filed for bankruptcy and liquidation in South Africa. Beginning in 2020, it faced increasing regulatory pressure in the United States and South Africa.
Court documents reveal Steinberg is an international fugitive. CFTC said his residency is in South Africa, but he was detained in Brazil on an Interpol warrant.