CFTC brings $1.7B fraud case involving Bitcoin against South African national

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America Commodity Futures Buying and selling Fee, or CFTC, has taken enforcement motion in opposition to a South African nationwide in what the regulatory physique referred to as its “largest fraudulent scheme involving Bitcoin.”

In a Thursday announcement, the CFTC said it had filed a civil enforcement motion in federal court docket for fraud and registration violations in opposition to Cornelius Johannes Steynberg. The South African nationwide allegedly created and operated a world overseas foreign money commodity pool totaling greater than $1.7 billion, solely permitting the individuals to pay utilizing Bitcoin (BTC).

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The CFTC alleged that Steynberg used the South Africa-based agency Mirror Buying and selling Worldwide Proprietary Restricted to solicit BTC from the general public utilizing social media and varied web sites. From Could 2018 to March 2021, the regulatory physique claimed that he accepted not less than 29,421 BTC — valued at greater than $1.7 billion on the time, however roughly $564 million on the time of publication — together with from people in the USA.

“The defendants misappropriated, both straight or not directly, all the Bitcoin they accepted from the pool individuals,” stated the CFTC. “The CFTC seeks full restitution to defrauded buyers, disgorgement of ill-gotten beneficial properties, civil financial penalties, everlasting registration and buying and selling bans, and a everlasting injunction in opposition to future violations of the Commodity Alternate Act and CFTC Rules.”

Associated: The CFTC’s action against Gemini is bad news for Bitcoin ETFs

The case in opposition to Steynberg is the newest in a collection of enforcement actions the CFTC has taken in opposition to people allegedly utilizing cryptocurrencies for illicit functions or digital asset companies for violations of the Commodity Alternate Act. In June, the CFTC filed a lawsuit against Gemini, claiming the crypto change made false or deceptive statements to the regulatory physique in 2017. A federal court docket additionally ordered the founders of crypto derivatives change BitMEX to pay $30 million in penalties as a part of the conclusion of a swimsuit filed by the CFTC in October 2020.