Recent developments in the cryptocurrency market have raised concerns about the role of Australia’s security regulator in protecting citizens from fraudulent schemes. The HyperVerse crypto scheme, a high-profile case, has brought the Australian Securities and Investments Commission (ASIC) under scrutiny for its alleged failure to alert the public about the potential risks involved.

The HyperVerse Crypto Scheme: A Brief Overview

The HyperVerse crypto scheme is a digital currency investment program that promised high returns to its investors. However, it turned out to be a scam, leading to significant financial losses for those who invested in it. The scheme used sophisticated marketing techniques and the allure of high returns to attract investors, many of whom were unaware of the risks involved in such investments.

ASIC’s Role and Responsibilities

As the country’s security regulator, ASIC is responsible for ensuring that Australia’s financial markets are fair and transparent. This includes monitoring and regulating cryptocurrency schemes like HyperVerse. However, in the case of HyperVerse, critics argue that ASIC failed to fulfil its duty to protect investors.

Public Outcry and Scrutiny of ASIC

The fallout from the HyperVerse crypto scheme has led to a public outcry, with many calling for increased scrutiny of ASIC. Critics argue that the regulator should have done more to alert the public about the potential risks of the scheme. They point to the fact that despite numerous red flags, ASIC failed to issue any warnings about HyperVerse until it was too late.

• For instance, the scheme promised guaranteed returns, a common sign of a scam. Yet, ASIC did not issue any warnings about this.

• Furthermore, HyperVerse was not registered with ASIC, another red flag that the regulator seemingly overlooked.

Case Studies and Statistics

Unfortunately, the HyperVerse crypto scheme is not an isolated incident. According to a report by the Australian Competition and Consumer Commission (ACCC), Australians lost over $70 million to cryptocurrency scams in 2020, a 20% increase from the previous year. This highlights the urgent need for more effective regulation and public awareness campaigns to protect investors.

Steps Towards Improvement

In response to the criticism, ASIC has pledged to improve its monitoring of cryptocurrency schemes and to increase public awareness about the risks involved. The regulator has also called for greater powers to regulate the cryptocurrency market, arguing that this would help prevent future scams.

Conclusion: The Need for Vigilance and Regulation

The HyperVerse crypto scheme serves as a stark reminder of the risks involved in cryptocurrency investments. It also highlights the crucial role that regulators like ASIC play in protecting investors. While ASIC has faced criticism for its handling of the HyperVerse case, it is clear that the regulator is taking steps to improve its oversight of the cryptocurrency market. However, this case underscores the need for investors to be vigilant and for regulators to have the necessary powers to effectively monitor and regulate this rapidly evolving market.

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Johann Steynberg, the founder and CEO of Mirror Trading International, has been ordered to pay over $1.73 billion in restitution to victims of his bitcoin ponzi scheme. The court has also ordered Steynberg to pay a civil monetary penalty of a similar amount. The Commodity Futures Trading Commission (CFTC) conceded that orders requiring payment of funds “may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets.”

‘Largest Fraudulent Scheme Involving Bitcoin’ in the History of the CFTC

A United States Federal Court recently handed down a default judgment and permanent injunction against Johann Steynberg, the CEO of the now-defunct bitcoin ponzi Mirror Trading International (MTI). According to a statement released by the U.S. derivatives regulator the Commodity Futures Trading Commission (CFTC) on April 27, Steynberg is required to pay $1,733,838,372 in restitution to defrauded victims and a $1,733,838,372 civil monetary penalty.

The derivatives regulator’s statement also revealed that the penalty handed down by the court “is [the] highest civil monetary penalty ordered in any CFTC case.” The court action itself is reported to be the “largest fraudulent scheme involving Bitcoin charged in any CFTC case.”

As previously reported by Bitcoin.com News, Steynberg, who was based in South Africa at the time, had repeatedly faced allegations of operating a bitcoin Ponzi scheme before he fled to Brazil in December 2020. Shortly after his disappearance, liquidation proceedings against MTI were instituted by victims based in South Africa.

Almost a year after he disappeared, Steinberg was captured by Brazilian law enforcement and is awaiting his extradition to either the U.S. or his native home of South Africa.

Steynberg and MTI Failed to Comply With CPO Regulations

As per the CFTC statement, the U.S. court order outlines Steynberg’s alleged fraudulent activities as well as his failure to comply with regulations.

“The order finds that Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited (MTI), a company currently in liquidation in the Republic of South Africa, is liable for fraud in connection with retail foreign currency (forex) transactions, fraud by an associated person of a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations,” reads the CFTC statement.

Although MTI was primarily operating and targeting victims based in South Africa, the CFTC statement claimed that Steynberg and his company had accepted bitcoin from “some 23,000 individuals in the U.S.” without being “registered as a CPO as required.” The regulator also alleged that Steynberg and MTI had “misappropriated all of the Bitcoin they accepted from pool participants.”

Meanwhile, the CFTC also acknowledged in the statement that the penalty handed down by the court may “not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets.”

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Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.