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

key takeaways

  • 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.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

Sponsored

Injective is not waiting for the future of finance. It is bringing it directly to us, today.

article-image

Bitcoin has been bullish for nearly 1,000 days

article-image

Robinhood announced that it’s building an L2 and also plans to launch staking for US users

article-image

“We’re not really doing anything controversial,” said co-founder Zak Folkman at Permissionless last week

article-image

Why equities are more stable than in past decades, plus advice from Peter Lynch

article-image

As Permissionless speakers talk on-chain RWA potential, tokenized stock platform Dinari secures FINRA broker-dealer approval