And, all fooling aside, the CFTC has charged Cornelius Johannes Steynberg and MTI with fraud.
Even better, Steynberg was a fugitive from South Africa, but InterPol caught up with him in Brazil.
You can read that part here:
CFTC Charges South African Pool Operator and CEO with $1.7 Billion Fraud Involving Bitcoin
But sadly, that short press release lacked the magic word - Ponzi. I said this was a Ponzi and I'm not going to settle for simple fraud. But, what the CFTC failed to mention in press release about the charges and arrest does show up in a statement from Kristin Johnson (one of the Commissioners of the CFTC. I am pleased to see that the CFTC agrees with me on this issue. Here's her full statement on this Ponzi Scheme:
"
June 30, 2022
Today, the Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Western District of Texas against Cornelius Johannes Steynberg of South Africa and Mirror Trading International Proprietary Limited (MTI), a South African company, alleging that they operated a fraudulent scheme to solicit, accept, and pool more than $1.7 billion to trade off-exchange, retail foreign currency (forex) on a leveraged, margined and/or financed basis. Defendants engaged in an international fraudulent multilevel marketing scheme via various websites, in addition to social media, to solicit bitcoin from members of the public for participation in their pool. At least 23,000 of the pool participants—most, if not all, of whom were not eligible contract participants—were from the United States.
Instead of trading forex as represented, Defendants misappropriated pool funds, misrepresented their trading and performance, provided fictitious account statements as well as created a fictitious broker at which trading purportedly took place, and in general operated the pool as a Ponzi scheme. As a matter of fact, the little trading that Defendants did was unprofitable, and they misappropriated essentially all of the at least 29,421 bitcoin accepted from participants. The CFTC’s complaint seeks full restitution on behalf of defrauded participants, as well as disgorgement, civil monetary penalties, permanent trading and registration bans, and other relief. Notably, this fraud represents the largest to date charged by the CFTC involving Bitcoin.
Fraudsters often take full advantage of new technology, global connectivity, and perceived lack of a cop on the beat to perpetrate their scams. This action demonstrates that the Division of the Enforcement (DOE) is committed to protecting Americans, regardless of the technology or borders involved, and that the CFTC is very much focused on detecting and prosecuting these frauds, including by working closely with our counterparts overseas. I want to commend DOE staff for their outstanding collaboration with domestic and foreign counterparts in investigating this matter, including the South African Financial Sector Conduct Authority, the Financial Services Commission of Belize, the Finnish Financial Supervisory Authority, the Texas State Securities Board, the Alabama Securities Commission, the North Carolina Secretary of State, Securities Division, the Mississippi Secretary of State, Securities Division, the U.S. Attorney’s Office for the Southern District of New York, and the Federal Bureau of Investigation’s Southern District of New York Field Office."
From:
Statement of Commissioner Kristin Johnson Regarding the CFTC Charging South African Commodity Pool Operator and CEO with $1.7 Billion Fraud Involving Bitcoin
Let me repeat the best part:
"Instead of trading forex as represented, Defendants misappropriated pool funds, misrepresented their trading and performance, provided fictitious account statements as well as created a fictitious broker at which trading purportedly took place, and in general operated the pool as a Ponzi scheme. As a matter of fact, the little trading that Defendants did was unprofitable, and they misappropriated essentially all of the at least 29,421 bitcoin accepted from participants."
The CFTC confirms this was a Ponzi, that performance was misrepresented, that very little money was traded, that they used a fake broker (after FxChoice dumped them), and essentially all of the money was misappropriated.
If only someone could have warned people 2 years earlier and said something like:
Pooled investments that are not like PAMMs are very dangerous for 2 reasons.
1. How do you know any results the company shows you are real? Unless you can login with the investor password, you can't be certain whether or not ANY trading is going on. Results in a spreadsheet are just numbers entered into a spreadsheet and may or may not be based in reality. Even broker statements can be faked, unless the broker sends those directly to you.
2. Even if you can get a quick peek at a live account, how do you know that your money is in that pool? Check the CFTC's enforcement press releases. All sorts of profitable pooled investments are really losing pooled investments and most of the money never went anywhere near the broker. Instead, it went to finance the lavish lifestyle of the people running the pool and to pay out some of the non-existent profits to early investors. If this is what's happening, your money is in a Ponzi scheme.
Oh wait, I did. That's part of what I wrote on page 1 of this thread on June 17, 2020. Despite my warnings plus FxChoice joining the thread and clearly stating that some of their claims were false, certain people in this thread kept coming up with excuses and casting doubt on all the obvious warning signs.
If any of the MTI fans who previously cast doubt on all the red flags raised by me and many others in this thread have enough nerve to come back, I look forward to your apologies or else your fantastic stories of how the upcoming trial will somehow exonerate Johannes and how he will be crowned king of all traders and rule over all the markets.
My deepest sympathies to all the true victims of this scam. I hope that you can get at least some of your money back and I hope that everyone who defended or otherwise promoted this scam is charged as an accessory.
