April 28 (Cointime) - A South African executive has been ordered by a US judge to pay a record-breaking sum of over $3.4 billion in fines and restitution for his role in a Bitcoin-related fraud scheme. This action is the largest fraudulent scheme involving Bitcoin charged in any US Commodity Futures Trading Commission(CFTC) case.

According to the order, Cornelius Johannes Steynberg, the CEO and founder of Mirror Trading International Proprietary Limited (MTI), a company undergoing liquidation in South Africa, has been held accountable for fraud linked to retail foreign currency (forex) dealings, fraud by an individual associated with a commodity pool operator (CPO), registration breaches, and non-compliance with CPO regulations.

Under the order, Johann Steynberg has been directed to compensate defrauded victims with $1,733,838,372 in restitution and to pay a civil monetary penalty of the same amount, marking the largest civil monetary penalty ever issued in a CFTC case. Furthermore, the order permanently prohibits Steynberg from engaging in activities that breach the Commodity Exchange Act (CEA) as charged, registering with the CFTC, or trading in any markets regulated by the CFTC. 

According to CFTC, Steynberg solicited Bitcoin from the public through an international fraudulent multilevel marketing scheme, claiming to trade off-exchange retail forex through a proprietary “bot” or software program. Steynberg and MTI misappropriated all of the Bitcoin they accepted from pool participants without being registered as a Commodity Pool Operator (CPO), as required. 

The CFTC cautions that orders requiring payment of funds to victims may not result in the recovery of any money lost.