In line with an recent official announcement revealed a federal court of New York has ordered crypto hedge fund Gelfman Blueprint, Inc. [GBI] and its chief executive officer ‘Gelfman’ to pay over $2.5 Mln for in operation of an illicit Ponzi scheme. GBI is a New York-based corporation and denominated Bitcoin [BTC] hedge fund launched back in year 2014. As per the company’s web site, by 2015 it had 85 customers and 2,367 Bitcoins [BTC] under its management.
The order is the continuation of the initial anti-fraud social control action filed by the U.S. Commodity Futures Trading Commission [CFTC] against GBI in earlier in Sept 2017. The CFTC charged GBI for allegedly running a Ponzi scheme from 2014 to 2016, telling investors that it had developed an algorithm referred to as “Jigsaw” that allow substantial returns through a commodity fund. However in reality, this complete scheme was just a fraud.
In line with the announcement, GBI and Gelfman fraudulently raised over $600,000 USD from eighty customers. Moreover, Gelfman pretended a fake “hack” to hide the scheme’s commercialism losses which eventually resulted in the loss of virtually all investors funds.
The current order charges GBI and Gelfman to pay over $2.5 Mln in civil financial penalties and restitution. GBI and Gelfman are ordered to pay $554,734.48 USD and $492,064.53 USD in restitution to customers and $1,854,000 USD and $177,501 USD in civil financial penalties, considerably.
The CFTC’s Director of Enforcement ‘James McDonald,’ aforementioned that “this case marks yet one more victory for the Commission within the virtual currency enforcement arena. As this string of cases shows, the CFTC is set to spot dangerous actors in the virtual currency markets and hold them accountable.”
Even last month, the CFTC filed a suit with the U.S. District Court for the Northern District of TX against 2 defendants for the allegedly illicit solicitation of Bitcoin [BTC]. In line with the suit, defendants Morgan Hunt and Kim Hecroft were running two illicit businesses and misleading the general public to speculate in leveraged or margined foreign currency contracts, like forex, binary options, and diamonds.