Bitcoin Hedge Fund and CEO Slapped With $2.5 Million Penalty for Ponzi Scheme

A New York federal courtroom has ordered BTC hedge fund Gelfman Blueprint, Inc.and its CEO Nicholas Gelfman to pay over $2.5 million in penalties for a fraudulent Ponzi scheme.

A New York federal courtroom has ordered cryptocurrency hedge fund Gelfman Blueprint, Inc. (GBI) and its CEO Nicholas Gelfman to pay over $2.5 million for working a fraudulent Ponzi scheme, in accordance with an official announcement revealed Oct. 18.

GBI is a New York-based company and denominated Bitcoin (BTC) hedge fund included in 2014. As acknowledged on the corporate’s web site, by 2015 it had 85 clients and a couple of,367 BTC underneath administration.

The order is the continuation of the preliminary anti-fraud enforcement motion filed by the U.S. Commodity Futures Trading Commission (CFTC) towards GBI in September 2017. The CFTC charged GBI for allegedly working a Ponzi scheme from 2014 to 2016, telling traders that it had developed a pc algorithm referred to as “Jigsaw” which allowed for substantial returns by a commodity fund. In actuality, all the scheme was a fraud.

Per the announcement, GBI and Gelfman fraudulently solicited over $600,000 from at the least 80 clients. Moreover, Gelfman arrange a faux laptop “hack” to hide the scheme’s trading losses. It ultimately resulted within the lack of virtually all buyer funds.

The present order costs GBI and Gelfman to pay over $2.5 million in civil financial penalties and restitution. GBI and Gelfman are ordered to pay $554,734.48 and $492,064.53 in restitution to clients and $1,854,000 and $177,501 in civil financial penalties, respectively.

James McDonald, the CFTC’s Director of Enforcement, mentioned that “this case marks one more victory for the Commission within the digital foreign money enforcement enviornment. As this string of instances reveals, the CFTC is set to establish unhealthy actors in these digital foreign money markets and maintain them accountable.”

Last month, the CFTC filed a go well with with the U.S. District Court for the Northern District of Texas towards two defendants for the allegedly fraudulent solicitation of BTC. Per the go well with, defendants Morgan Hunt and Kim Hecroft had been working two fraudulent companies and deceptive the general public to put money into leveraged or margined international foreign money contracts, comparable to foreign exchange, binary choices, and diamonds.

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Source: BTC Upload