Nicholas Gelfman, Bitcoin Ponzi Scheme Founder Bags $2.5 Million Fine
New York investment firm Gelfman Blueprint, Inc. (GBI) will be paying over $2.5 million in fines for fraudulent practices in a Bitcoin Ponzi Scheme. This was filed by the Commodity Futures Trading Commission (CFTC) which marks the first time that CFTC has made an anti-fraud enforcement action involving bitcoin.
CTFC press release yesterday states that Gelfman Blueprint Inc. and CEO Nicholas Gelfman engaged in fraudulent practices which includes hiding trading losses by giving fake performance reports to customers regarding bitcoin trading.
This made customers to believe that profits had been made on their behalf.
The CFTC, which filed charges against the platform last September, described the operation as “a pooled commodity fund that purportedly employed a high-frequency, algorithmic trading strategy, executed by Defendants’ computer trading program called ‘Jigsaw.’” GBI started its Ponzi scheme in 2014.
CCN last year reported that Gelfman received over $600,000 from 80 different investors over the course of two years.
CFTC Director of Enforcement James Mcdonald stated:
“This case marks yet another victory for the Commission in the virtual currency enforcement arena. As this string of cases shows, the CFTC is determined to identify bad actors in these virtual currency markets and hold them accountable. I’m grateful to the members of Enforcement’s Virtual Currency Task Force for their tireless work on these matters.”
The fact notwithstanding that the legal proceedings started last year, penalties were not finalized until three days back.