Categories
The CFTC has filed a lawsuit against Johan Steynberg, the CEO of Mirror Trading International.
The government agency said that Mirror Trading International was a Ponzi scheme that was worth $1.7 billion.
On June 30, the CFTC sued Mirror Trading International and Cornelius Johannes Steynberg (right).
The CFTC has found “at least 23,000” US MTI investors and says there are even more investors in other parts of the world. Together, investors in Mirror Trading International gave over 29,421 bitcoin, which had a street value of $1.7 billion at the time the CFTC looked into it.
Mirror Trading International went through two stages: first, there was the forex bot, which failed; and then there was a bitcoin trading bot, which also failed.
There really wasn’t an MTI bot. Steynberg and his partners, Clynton and Cheri Marks (right), who I have long thought are the real owners of MTI, swindled money out of investors to help themselves.
All of the Bitcoin they got from pool members was taken by the defendants, either directly or indirectly.
Steynberg, both on his own and as MTI’s agent, hid important facts from people who were already in the pool and those who were thinking about joining. He didn’t tell them that:
(a) the defendants stole pool funds;
(b) there was no trading “bot” that traded successfully on participants’ behalf;
(c) there was no profitable trading in forex or anything else on participants’ behalf; and
(d) “accounts” were hacked.
The CFTC says that most of the 27,574 bitcoins have been taken by Steynberg, the Marks, and their helpers. A small amount of the money made was used to run MTI (payments to top recruiters and limited ROI withdrawals).
The defendants didn’t put the 27,574 bitcoin that participants gave them into the FXChoice pool account.
Overall, the limited trading the defendants did in the FXChoice Pool account led to losses, and the defendants stole the remaining 27,574 bitcoin sent to them by participants for trading.
They did this by not using all of the funds for trading and by giving Bitcoin to some participants as fake “profits” and “bonus” payments, like in a “Ponzi” scheme. by trying to sell a forex investment scheme to people in the US without registering with the CFTC.
Late in 2020, when MTI fell apart, Steynberg left South Africa for Brazil. He left a wife and a child behind. South Africa asked Interpol for an international arrest warrant for Steynberg, which led to his arrest in January 2022.
South Africa has asked for Steynberg to be sent there. Steynberg is fighting extradition because he had an affair with a Brazilian woman and got her pregnant while he was on the run. Documents from a Brazilian court showed what Steynberg’s defense was all about earlier this month. No new information has come out.
The CFTC’s complaint says that Steynberg’s current situation is known, but it doesn’t say anything else; Steynberg lived in Stellenbosch, Western Cape, South Africa, at his last known address.
He is currently on the run from South African law enforcement, but he was just arrested in Brazil because of an INTERPOL arrest warrant.
The CFTC wants Mirror Trading International and Steynberg to do the following:
confirmation that they broke the CFTC rules and the Commodity Exchange Act;
a permanent injunction that forbids any kind of trading, fake or real;
disgorgement;
restitution to the victims of Mirror Trading International, including interest from before and after the verdict;
civil money fines must be paid. If the CFTC’s request is granted, MTI and Steynberg will have to tell the court about all of their assets and debts, as well as all of the money they got from and gave to participants and other people in connection with their commodity interests, as well as all of the money they spent on salaries, commissions, interest, fees, loans, and other uses of money or property they got from their commodity interests.
That will almost certainly show that the Marks are the real people running Mirror Trading International and getting the most out of it.
That won’t happen, though, until the CFTC wins the case. First of all, when is Steynberg going to be sent back to South Africa? What will happen to him when he gets there?
The CFTC thanked a number of cooperating authorities, such as the FSCA in South Africa, for their help. The CFTC is grateful to the South African Financial Sector Conduct Authority, the Financial Services Commission of Belize, the Finnish Financial Supervisory Authority, the Texas State Securities Board, the Alabama Securities Commission, the North Carolina Secretary of State, Securities Division, the Mississippi Secretary of State, Securities Division, the U.S. Attorney’s Office for the Southern District of New York, and the Federal Bureau of Investigation for their help.
Aside from that, though, the FSCA hasn’t done anything to hold scammers at Mirror Trading International accountable. In South Africa, Clynton and Cheri Marks are still on the run.
One unknown is whether or not Steynberg and his partners will be charged in the US. The fact that the CFTC and DOJ worked together suggests that this might have happened (in which case the indictment would be under seal).
No matter what happens, we probably won’t know what happens with the criminal case until Steynberg is back from Brazil.
I added the CFTC’s fraud case against Mirror Trading International to BehindMLM’s calendar. We’ll keep you up to date as we keep track of the case.
