Because he collected Bitcoin with false promises and embezzled them, a South African businessman has to pay the money back and a fine.
The head of a South African company has been ordered by a US court to pay a total of $3.4 billion for Bitcoin fraud. This is reported by the Reuters news agency and explains that half of the sum consists of a repayment to the victims and a civil penalty. It is the highest such penalty ever. According to the indictment, the man raised crypto money from thousands of people on the Internet and promised them that he would use it to operate a so-called commodity futures fund. However, all of these bitcoins were misappropriated directly or indirectly. The court has now agreed with this assessment.
Little hope of actual repayment
As quoted by the news outlet, a South African named Cornelius Johannes Steynberg raised a total of 29,421 Bitcoin from around 23,000 people between May 2018 and March 2021. The cryptocurrency was worth $1.7 billion at the end of that period. During this period, however, the price of the cryptocurrency has risen from less than $10,000 to over $60,000 at times. Depending on when the crypto money was sold, the convict will certainly not have taken the entire sum. Nevertheless, the court has now decided that he not only has to pay the entire sum to the victims but also has to pay the same amount again as a penalty.
According to Bloomberg, the court also admits that the conviction could not result in a refund of the money. The perpetrators may not have had sufficient financial resources. Steynberg himself was on the run and was arrested in Brazil in 2021 thanks to an international arrest warrant. The lawsuit was filed by the US Commodity Futures Trading Commission, which has already banned the man from any financial activity in its area. The fraud is reminiscent of similar cases in other states. At the beginning of the year, two men were convicted in Austria for causing 13 million euros in damage by falsely claiming to invest money in crypto markets.