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US court orders Mirror Trading International to pay $1.7 billion in restitution for crypto fraud

By Pete Schroeder

WASHINGTON (Reuters) -A U.S. District Court judge has ordered a South African to pay over $1.7 billion in restitution to victims for operating a fraudulent commodity pool worth roughly that amount in bitcoin, the Commodity Futures Trading Commission announced Thursday.

The order against Mirror Trading International Proprietary Limited (MTI) resolves an enforcement case the CFTC had filed against the company and its CEO, Cornelius Johannes Steynberg.

In a June enforcement order, the CFTC claimed that MTI solicited bitcoin online from thousands of people to purportedly operate a commodity pool. The company claimed to have proprietary software that would realize significant trading gains for investors who pooled their bitcoin with it, but in reality no such "bot" existed.

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In reality, only a small portion of the pooled bitcoin was ever invested, at a loss, and the rest was "misappropriated," according to the CFTC. The company ultimately filed for bankruptcy in 2021, shortly after which South African authorities launched a fraud investigation.

(Reporting by Paul Grant; Editing by Caitlin Webber and Chizu Nomiyama)