CFTC Charges South African Bitcoin Pool Operator With $1.7B Fraud

The commodities watchdog accused MTI of promising to grow investors’ assets with a bot that didn’t exist

article-image

Blockworks Exclusive art by axel rangel

share
  • The alleged scam is the largest fraudulent scheme involving bitcoin in any CFTC case
  • The regulator said MTI “misappropriated, either directly or indirectly, all of the bitcoin they accepted from the pool participants”

The Commodity Futures Trading Commission has filed civil charges against Cornelius Johannes Steynberg and his South Africa-based bitcoin pool operator Mirror Trading International Proprietary Limited (MTI) Thursday over fraud and registration violations. 

In a lawsuit filed in the US District Court for the Western District of Texas, CFTC alleged MTI’s CEO Steynberg accepted at least 29,421 bitcoin from approximately 23,000 individuals in the US and even more throughout the world, to “participate in the commodity pool without being registered as a commodity pool operator as required,” according to CFTC’s statement

It was the “largest fraudulent scheme involving bitcoin charged in any CFTC case,” the regulator said. 

The statement also said the CFTC will seek full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act and CFTC regulations. 

The CFTC said in the complaint that MTI claimed to have a proprietary “bot” or software program that would help investors grow their trading gains. Yet, no such software program existed, the regulator said — Steynberg and his firm “misappropriated, either directly or indirectly, all of the bitcoin they accepted from the pool participants.”

Steynberg had been a fugitive from South African law enforcement. He was recently arrested by Brazilian police on an INTERPOL arrest warrant, according to the agency. 

A representative of MTI couldn’t be reached to comment immediately.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (20).png

Research

The dynamic between Ethena, Pendle and Aave exhibits a mutually-beneficial relationship, where the offerings of each business grows the top lines of every party in this exchange. Pendle sits at the intersection of YBA issuers (Ethena) and money markets (Aave), demonstrating heightened utilization rates of YBAs, where the PTs then exhibit profound utilization as collateral. YBA issuers see Pendle as a premier go-to-market venue, often underwriting incentives for liquidity on the market and solving for Pendle’s supply side, while money markets view PTs as attractive collateral types to lend against, solving for Pendle’s demand side. PTs represent a highly profitable collateral listing for Aave, with depositors maxing out the available borrow capacity. Pendle’s recent launch of Boros may now present the most material growth vector beyond what is currently exhibited on V2 markets, offering the ability to price yield, spreads, and duration risk across various points in time out into the future.

article-image

If fear moves markets, there could be more all-time highs to come

article-image

Ether-focused BitMine Immersion saw its daily trading volumes surge this week

article-image

From Ronin’s classic L2 pivot to Taiko’s based rollup and Puffer’s ultra-low-latency appchain testnet, Ethereum-aligned architectures are multiplying

article-image

The Gemini Wallet and Onchain hub are great for total beginners, but have a lot of room to grow

article-image

Airlines defend their rewards moat, Binance courts favor over breakfast, DAT fees pile up and systematic thinking