The U.S. regulatory authorities have taken final steps to resolve the case against Mirror Trading International (MTI), which had collapsed.
The U.S. Western District Court of Texas has ordered MTI to pay $1.7 billion in restitution to victims for executing a fraudulent scheme involving digital assets and forex, the Commodity Futures Trading Commission (CFTC) announced on September 7.
The CFTC noted that MTI and its CEO, Cornelius Steynberg, participated in an “international multilevel marketing scheme” accepting nearly 30,000 Bitcoin (BTC) from at least 23,000 people in the U.S. The announcement stated that MTI and Steynberg promised to provide access to an unregistered commodity pool in exchange for BTC contributions, which never materialized.
The CFTC wrote: “Instead, MTI misappropriated nearly all of the funds.” It further noted that the latest court order and restitution effectively concluded a lawsuit that the regulatory agency had filed in June 2022.
In January 2021, MTI claimed to have over 260,000 members in 170 countries, with investors losing around $1 billion by the time of the liquidation. The MTI fraud case is considered one of the largest Ponzi schemes involving digital assets to date.
CFTC Commissioner Kristin Johnson wrote in the announcement: “I especially encourage the public to stay updated on information related to fraudulent and potentially abusive practices in the digital asset market by visiting our investor advisory webpage.” She added that the CFTC had initiated or resolved 10 fraud cases related to digital assets or forex since June 2023, stating:
“I commend the Enforcement Division for remaining vigilant and sending a strong message to the market that the Commission will take the necessary steps to protect its markets from fraud.”
This news comes as CFTC Commissioner Caroline Pham is advocating for a limited pilot program to address cryptocurrency regulations in the U.S. On September 7, the Commissioner stated that she has plans to propose a pilot program for the digital asset market, asserting that the U.S. may need to “catch up” with crypto-friendly regulatory regions soon.