Mirror Trading International (MTI), a South African Ponzi scheme, has been ordered by a federal judge to pay $1.7 billion (R32 billion) in restitution to thousands of victims in the United States.
- MTI defrauded at least 23,000 US residents through its bitcoin trading scheme.
- The scheme collapsed in December 2020 when it stopped making payments to its members, and its CEO and founder, Johann Steynberg, fled to Brazil.
- US authorities had been investigating MTI prior to its collapse, with Texas authorities identifying it as a “get-rich-quick scheme” as early as July 2020.
- In April, a judge ordered Steynberg to pay $1.73 billion in restitution to defrauded victims and an additional $1.73 billion as a civil monetary penalty, marking the highest civil monetary penalty ever ordered by the Commodity Futures Trading Commission (CFTC).
- The recent $1.7 billion restitution order against MTI, separate from the penalties imposed on Steynberg, brings the CFTC’s enforcement case against MTI to a close.
- While MTI’s liquidators in South Africa have been searching for missing bitcoin, the recovery of funds for US victims is uncertain as MTI’s liquidators filed for bankruptcy proceedings in the US, resulting in an automatic stay provision against collecting the funds.