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Crime and Investigations

Historic Bitcoin Fraud Scheme: $3.5 Billion to be Paid in Restitutions and Fines

Historic Bitcoin Fraud Scheme: $3.5 Billion to be Paid in Restitutions and Fines

With the evolution of the crypto market comes an increase in fraud cases, resulting in the theft of large amounts of cryptocurrency.

Recently, a South African executive was ordered to pay over $3.4 billion in restitution and fines for his involvement in a fraudulent scheme.

Cornelius Johannes Steynberg, the founder and CEO of Mirror Trading International Proprietary, solicited Bitcoin from individuals for participation in an unregistered commodity pool.

This resulted in soliciting over 29,000 Bitcoin, worth more than $1.7 billion, from at least 23,000 people globally. However, according to the US Commodity Futures Trading Commission, Steynberg misappropriated all of the Bitcoin accepted from pool participants.

Steynberg’s fraudulent scheme operated as a Bitcoin investment pool that generated daily profits using bot trading algorithms. But the CFTC discovered that the bot trading algorithms were a hoax and that Steynberg and other scheme operators had used the pool’s funds for personal enrichment.

READ MORE: Bitcoin: Here is What’s Driving the Recent Price Surge, According to Arthur Hayes

The $3.4 billion fine imposed on Steynberg is the largest civil monetary penalty ever in any CFTC case, underscoring the severity of the fraud and the role of Bitcoin in the scheme.

While the verdict may serve as a warning to other bad actors in the crypto space, it also highlights the need for increased regulation in the industry to safeguard investors from fraudulent schemes.

Despite recent developments, including the collapse of major bank First Republic Bank, the crypto market has seen bullish activity. Over the past 24 hours, the global crypto market cap has risen by 1.4%, with a total value of over $1.2 trillion.

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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