The former operator of binary options company Blue Bit Banc and Blue Bit Analytics (BBB), Blake Kantor, has been sentenced to 86 months’ imprisonment after pleading guilty to operating a scheme to scam investors of BBB.
According to a statement released by the United States Department of Justice (DOJ) on Monday, Kantor was sentenced by United States District Judge Sandra J. Feuerstein in federal court in Central Islip, New York.
He was found to have defrauded not only BBB investors but also BBB investors who invested in a cryptocurrency known as ATM Coin. Following his release, Kantor will be subject to three years of supervised release.
In addition to his prison sentence, Kantor has also been ordered to pay restitution of $806,405 to the victims of his crime, forfeiture of $1.5 million, and forfeiture of approximately $153,000 of stolen proceeds, the statement said.
The sentence delivered on Monday follows on from Kantor pleading guilty to conspiracy to commit wire fraud in November of last year, as Finance Magnates reported. As part of his plea deal, he also admitted to obstructing the government’s investigation.
James McDonald, Director, Division of Enforcement, U.S. Commodity Futures Trading Commission (CFTC), who announced the sentence, said: “The CFTC is committed to working vigorously to root out fraud in all of our markets, including those involving virtual currencies.
“As this parallel action shows, we will continue to work with our law enforcement partners to ensure that those who engage in this sort of misconduct are identified and held accountable. I am grateful to the U.S. Attorney and his team for their work on this important case.”
Understanding the Gaps in Forex TradingGo to article >>
Background on the BBB case
Kantor established BBB in March of 2014. According to the DOJ, from around 2014 up until 2017, he and others solicited around $1.5 million from more than 700 investors in the company’s binary options.
As part of the scheme, Kantor promised investors predetermined profits which would be based on the actual prices of securities, currencies, and other investments.
“However, Kantor did not inform the investors that a BBB computer software program fraudulently altered data associated with binary options investments, so that the probability of investors earning a profit favored BBB and disadvantaged investors,” the statement said.
In addition to the binary options scheme, Kantor also persuaded investors of BBB to convert their BBB investments into ATM Coin. This was a worthless cryptocurrency which he told investors was worth as much as $600,000.
FBI agents informed Kantor that they were looking into his dealings with binary options in October 2017. Following this, Kantor got a co-conspirator to alter BBB customer lists, and he deleted emails related to his scheme.
When the FBI interviewed Kantor, he incorrectly claimed that he hadn’t been involved in binary options since August 2013.