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The CFTC has filed a lawsuit against Johan Steynberg, CEO of Mirror Trading International.

Mirror Trading International was a $1.7 billion Ponzi fraud, according to the authorities.

On June 30, the CFTC filed a complaint against Cornelius Johannes Steynberg (right) and Mirror Trading International.

The CFTC has identified “at least 23,000” US-based MTI investors, but there are likely many more throughout the globe.

Together, Mirror Trading International investors turned over 29,421 bitcoin, which had a street value of $1.7 billion at the time of the CFTC probe.

After the initial phase of Mirror Trading International’s operations failed, a bitcoin trading bot was introduced.

There was no MTI bot in actuality. I’ve always felt that Steynberg and his collaborators Clynton and Cheri Marks (right) are the real proprietors of MTI, and they used investor monies for their gain.

All of the Bitcoin that the defendants received from pool participants were either directly or indirectly misused.

In solicitations to existing and potential pool members, Steynberg, personally and as MTI’s agent, committed dishonest omissions of important information in furtherance of the fraudulent scheme, including but not limited to omitting to disclose that:

a) The defendants misused pool monies;

(a) No trading “bot” was effective in trading on participants’ behalf;

(c) None of the participants engaged in lucrative forex or another trading;

(b) Participants were given “account statements” that were simulations of trades made on “demo” accounts made using the MetaTrader 4 (“MT4”) computerized trading platform;

(e) said “returns” that were paid to some participants were their main deposits; and

(f) Steynberg established the online broker Trade300, where Defendants allegedly exchanged Bitcoin from participants, to promote the fraudulent scheme.

According to the CFTC, Steynberg, the Marks, and their allies kept the majority of the 27,574 bitcoin. Only a small portion of the take was utilized to run MTI (payments to top recruiters and limited ROI withdrawals).

The defendants failed to transfer 27,574 Bitcoin from the pool’s users to the FXChoice account.

Defendants misappropriated the remaining 27,574 Bitcoin sent by participants to Defendants for trading, including by failing to use all of the funds for trading and by giving Bitcoin to certain participants as phony “profits” and “bonus” payments in the style of a “Ponzi” scheme. Defendants’ limited trading in the FXChoice Pool account resulted in overall losses.

The commission claims MTI and Steynberg violated the Commodity Exchange Act by promoting a forex-related investment program to US citizens while failing to register with the CFTC.

Steynberg left South Africa for Brazil after MTI’s bankruptcy in late 2020. He left a wife and child behind.

Following a South African appeal to Interpol, Steynberg was ultimately detained in January 2022.

Steynberg’s extradition has been requested by South Africa. Steynberg is resisting extradition because he had a lover in Brazil when he was running from the law.

Brazilian court records were used earlier this month to disclose Steynberg’s defense. There have been no more developments.

Steynberg’s present position is acknowledged in the CFTC’s Complaint, but no more information is provided;

The last place Steynberg lived was in Stellenbosch, in South Africa’s Western Cape.

He is now wanted by South African law enforcement but was recently taken into custody in Brazil according to an INTERPOL arrest order.

The CFTC is seeking the following relief from Mirror Trading International and Steynberg:

Restitution to victims of Mirror Trading International, including pre-judgment and post-judgment interest, disgorgement, and restitution, as well as payment of civil monetary penalties. Confirmation that they broke the Commodity Exchange Act and CFTC Rules.

One request made by the CFTC that is particularly intriguing if granted will involve MTI and Steynberg;

provide the Court with an accounting of all of their assets and debts, as well as the money they received from and paid to participants and other parties in connection with commodity interests. This accounting should include all money they spent on salaries, commissions, interest, fees, loans, and other expenditures of any kind from at least December 2017 to the time of the accounting.

That will probably certainly implicate the Marks as being Mirror Trading International’s true operators and main beneficiaries.

But unless the CFTC wins the case, that won’t happen. To start with, when will Steynberg be extradited, and what will happen to him when he reaches South Africa?

The CFTC recognized the support of other collaborating agencies, including the FSCA of South Africa;

The Financial Industry Regulatory Authority of South Africa, the Financial Services Commission of Belize, the Finnish Financial Supervisory Authority, the Texas State Securities Board, the Alabama Securities Commission, the Securities Divisions of the Secretaries of States of North Carolina and Mississippi, the U.S. Attorney’s Office for the Southern District of New York, and the Federal Bureau of Investigation are all grateful for their assistance.

However, other than that, the FSCA has not demonstrated any desire to prosecute the fraudsters at Mirror Trading International. In South Africa, Clynton and Cheri Marks are still at large.

The possibility of Steynberg and his collaborators being charged in the US is a wild card. Cooperation between the CFTC and DOJ raises the possibility that this had place (in which case the indictment would be under seal).

In either case, it’s doubtful that we’ll learn anything about the status of the legal processes until Steynberg is extradited from Brazil.

The Mirror Trading International fraud case from the CFTC has been added to the BehindMLM calendar. As we follow the case, be sure to check back for updates.

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