US Regulators Order Mirror Trading International to Pay $1.7 Billion in Restitution

A US district court has ruled that Mirror Trading International (MTI), the collapsed cryptocurrency trading platform, must pay $1.7 billion in restitution to victims of its fraudulent scheme. The Commodity Futures Trading Commission (CFTC) announced the court order on September 7, stating that MTI and its CEO Cornelius Steynberg were engaged in a multi-level marketing scheme that defrauded thousands of investors.

MTI's Fraudulent Scheme

According to the CFTC, MTI accepted nearly 30,000 Bitcoin from at least 23,000 people in the US, promising to provide access to an unregistered commodity pool in exchange for BTC contributions. However, investigation revealed that no such pool existed, and MTI misappropriated the funds instead.

Resolution of the Case

The court order and restitution effectively conclude the case that the CFTC filed against MTI in June 2022. This marks a significant step towards providing justice to the victims of the Ponzi scheme.

MTI, once a prominent cryptocurrency trading platform, collapsed in late 2020 after one of its directors allegedly fled the country with funds entrusted by investors. The liquidation process revealed that investors had lost approximately $1 billion, making it one of the largest scams involving digital assets.

Regulators Remain Vigilant in the Crypto Market

CFTC Commissioner Kristin Johnson urged the public to stay informed about potential scams in digital assets markets. She emphasized that the CFTC is committed to protecting its markets from fraud and has brought or resolved ten fraud cases involving digital assets or forex since June 2023.

Meanwhile, CFTC Commissioner Caroline Pham is pushing for a limited pilot program to address cryptocurrency regulations in the US. Pham believes that the country may soon need to catch up with crypto-friendly jurisdictions. In contrast, CFTC Commissioner Summer Mersinger expressed concerns over enforcement actions against decentralized finance protocols, arguing that stakeholder engagement should be prioritized over reliance on enforcement alone.

As the crypto industry continues to evolve, regulators are actively working to establish a framework that supports innovation while safeguarding investors from fraudulent schemes.