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.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Maple Finance has successfully navigated significant market challenges through its strategic pivot to secured lending (Maple v2) and the launch of its Syrup product. Syrup has become a primary growth driver, delivering sustainable, outperforming stablecoin yields and rapidly increasing TVL. The upcoming custody-first Bitcoin staking product (istBTC) presents another significant avenue for expansion. Crucially, Maple has achieved operational profitability, a key inflection point that, combined with a fully vested token and active buyback mechanism, strengthens its investment case. While valuation metrics suggest potential undervaluation relative to peers and growth, the primary forward-looking risk identified is the long-term sustainability of its current high-take-rate collateral staking revenue model.

article-image

Funds disagree about which metrics matter, but agree fundamentals are key

article-image

PGP creator Phil Zimmermann’s connection with Bitcoin is complicated

article-image

Blockworks spoke with a dozen current and former employees about the problems that have plagued Bitget’s blockchain, Morph

article-image

Perpl, a perps DEX, plans to launch testnet by the end of this year

article-image

A recent Citi report predicted that stablecoin AUM could hit $3.7 trillion by 2030, largely because of institutional adoption

article-image

The startup hopes to reduce crypto’s reliance on AWS and Google Cloud