US court orders CEO of South African company to pay $3.4 billion for bitcoin fraud

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WASHINGTON, April 27 (Reuters) – A Texas federal judge has ordered the head of a South African company to pay $3.4 billion in what the U.S. commodities regulator has called its biggest fraud case ever. involving bitcoin.

Cornelius Johannes Steynberg was ordered to pay $1.7 billion in restitution to victims of the fraudulent scheme and an additional $1.7 billion in civil penalties, a record for any Commodity Futures Trading Commission case, said Thursday the regulator in a press release.

Steynberg, whose last known residence was in South Africa, could not immediately be reached for comment.

The CFTC charged Steynberg in July, saying Mirror Trading solicited bitcoin online from thousands of people to allegedly operate a commodity pool. The company claimed to trade foreign currency at retail off-exchange with participants who were not eligible to trade, the regulator said.

From May 2018 to March 2021, Steynberg accepted and diverted at least 29,421 bitcoins – valued at over $1.7 billion at the end of the period – from approximately 23,000 US participants, including over 1,300 in Texas , the CFTC said.

Default judgment against Steynberg was granted by Judge Lee Yeakel in the Western District of Texas, according to a court filing.

Reporting by Kanishka Singh in Washington

Our standards: The Thomson Reuters Trust Principles.

Kanishka Singh

Thomson Reuters

Kanishka Singh is a breaking news reporter for Reuters in Washington DC, who primarily covers US politics and national affairs in his current role. His past media coverage has covered a range of topics such as the Black Lives Matter movement; the US elections; the 2021 Capitol Riots and their follow-up investigations; the Brexit agreement; trade tensions between the United States and China; NATO’s withdrawal from Afghanistan; the COVID-19 pandemic; and a 2019 Supreme Court verdict on a site of religious conflict in his native India.

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