South African Firm Ordered to Pay $3.4 Billion in Bitcoin Fraud Case

A Court in Texas has ordered the chief executive of a South African crypto firm Cornelius Johannes Steynberg to pay a record-breaking $3.4 billion in a bitcoin fraud case, the largest-ever such case in the US, according to the Commodity Futures Trading Commission (CFTC).

The federal judge ruled that Steynberg should pay $1.7 billion in restitution to victims of the fraud scheme, and another $1.7 billion as a civil penalty. The CFTC alleges that Steynberg and his company, Mirror Trading International (MTI), solicited bitcoin online from thousands of people, claiming that they would operate a commodity pool.

However, the regulator says the firm instead misappropriated at least 29,421 bitcoin from over 23,000 participants, including over 1,300 in Texas. The default judgment against Steynberg was granted by Judge Lee Yeakel in Texas.

This case underscores the regulatory challenges that Bitcoin and other cryptocurrencies continue to face as they remain largely unregulated in many parts of the world. The CFTC's case against Steynberg is part of a wider crackdown on cryptocurrency fraud and highlights the need for increased regulation to protect investors.