The US commodities regulators have filed civil charges against a South African man and his company for operating a fradulent commodity pool worth over $1.7 billion in digital currency.
The Commodity Futures Trading Commission CFTC said the fraud scheme, which saw the firm solicit online from thousands of people to operate a commodity pool, was the largest it had ever pursued involving the digital currency. The CFTC filed charges against Mirror Trading International Proprietary Limited and its CEO, Cornelius Johannes Steynberg.
Steynberg had been a fugitive from South African law enforcement but was arrested in Brazil on an INTERPOL arrest warrant, the CFTC said. He couldn't be reached for comment immediately.
The CFTC said in its complaint that the company claimed to have proprietary software that would realize significant trading gains for investors who pooled their bitcoins with it, but in reality no such bot existed.
According to the CFTC, only a small portion of the pooled bitcoin was ever invested, and the rest was misappropriated. South African authorities launched a fraud investigation after the company filed for bankruptcy in 2021.
The CFTC said around 23,000 Americans were invested in the pool.