CFTC Sues New York Man and His Fund For Operating Bitcoin Ponzi Scheme
- The CFTC has asked the court to provide full restitution to defrauded pool participants.
The US Commodity Futures Trading Commission (CFTC) has charged New York-based Gelfman Blueprint, Inc. (GBI) and its principal, Nicholas Gelfman, with running a Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term that solicited at least 600,000 USD from approximately 80 investors.
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The CFTC filed its complaint on Thursday in the U.S. District Court for the Southern District of New York, naming the CEO and Head Trader of the Bitcoin denominated hedge fund which claims to be built on a high-frequency trading algorithm.
Starting in January 2014, the defendants took the monies form investors to be supposedly placed in a pooled commodity fund that purportedly employed a high-frequency, algorithmic trading strategy, executed by defendants’ computer trading program called “Jigsaw.
To create the illusion of stability, the defendants allegedly prepared and distributed false account statements to fund participants, telling investors that they made steady gains from trading the cryptocurrency, according to the complaint.
Based on the inflated profits, the defendants paid themselves several thousands of dollars in in fees, while in fact their trading account records reveal only infrequent and unprofitable trades. In addition, Gelfman is suspected of embezzling the remaining pooled monies after he “staged a fake computer hack designed to conceal trading losses and misappropriation,” the agency claims.
If convicted, Nicholas could serve up to 20 years in prison.
The CFTC has asked the court to provide full restitution to defrauded pool participants, disgorgement of ill-gotten gains and to pay the appropriate civil monetary penalties. In addition to fiscal claims, the agency seeks permanent registration and trading bans and a permanent injunction from future violations of federal commodities laws.
James McDonald, the CFTC’s Director of Enforcement, commented: “Through its work across the Commission, and as exemplified by the work of LabCFTC, the CFTC has demonstrated its continued commitment to facilitating market-enhancing FinTech innovation. Part of that commitment includes acting aggressively and assertively to root out fraud and bad actors in these areas. As alleged, the Defendants here preyed on customers interested in virtual currency, promising them the opportunity to invest in Bitcoin when in reality they only bought into the Defendants’ Ponzi scheme. We will continue to work hard to identify and remove bad actors from these markets.”
The US Commodity Futures Trading Commission (CFTC) has charged New York-based Gelfman Blueprint, Inc. (GBI) and its principal, Nicholas Gelfman, with running a Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term that solicited at least 600,000 USD from approximately 80 investors.
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The CFTC filed its complaint on Thursday in the U.S. District Court for the Southern District of New York, naming the CEO and Head Trader of the Bitcoin denominated hedge fund which claims to be built on a high-frequency trading algorithm.
Starting in January 2014, the defendants took the monies form investors to be supposedly placed in a pooled commodity fund that purportedly employed a high-frequency, algorithmic trading strategy, executed by defendants’ computer trading program called “Jigsaw.
To create the illusion of stability, the defendants allegedly prepared and distributed false account statements to fund participants, telling investors that they made steady gains from trading the cryptocurrency, according to the complaint.
Based on the inflated profits, the defendants paid themselves several thousands of dollars in in fees, while in fact their trading account records reveal only infrequent and unprofitable trades. In addition, Gelfman is suspected of embezzling the remaining pooled monies after he “staged a fake computer hack designed to conceal trading losses and misappropriation,” the agency claims.
If convicted, Nicholas could serve up to 20 years in prison.
The CFTC has asked the court to provide full restitution to defrauded pool participants, disgorgement of ill-gotten gains and to pay the appropriate civil monetary penalties. In addition to fiscal claims, the agency seeks permanent registration and trading bans and a permanent injunction from future violations of federal commodities laws.
James McDonald, the CFTC’s Director of Enforcement, commented: “Through its work across the Commission, and as exemplified by the work of LabCFTC, the CFTC has demonstrated its continued commitment to facilitating market-enhancing FinTech innovation. Part of that commitment includes acting aggressively and assertively to root out fraud and bad actors in these areas. As alleged, the Defendants here preyed on customers interested in virtual currency, promising them the opportunity to invest in Bitcoin when in reality they only bought into the Defendants’ Ponzi scheme. We will continue to work hard to identify and remove bad actors from these markets.”