Sunday, December 15, 2019

Crypto Scammer Ordered To Pay $3 Million By A New York Court

Avatar
Jide Idowu
I am Jide Idowu. A stay-at-home dad and a cryptocurrency enthusiast. I have had my hands on freelance writing for over five years, researching and writing guides, reviews, and latest cryptocurrency news for various blogs and individuals world over.

A New York Federal Court in the southern district has ordered perpetrator of a crypto Ponzi scam to pay about 3 million dollars in restitution and penalty. This was also inclusive of a ban on the company’s operation.

The First Crypto Scam Case Filed By U.S. CFTC

The first case filed by the U.S. Commodity Futures Trading Commission (CFTC) against a crypto firm involved in a scam committed by Gelfman Blueprint, Inc. (GBI) and its CEO, Nicholas Gelfman. This case was filed in September 2017.

According to the order the firm, Gelfman blueprint, Inc., GBI operated between the year 2014 and 2016. During its period of operation, the officers, agents, and workers of the firm operated a bitcoin Ponzi scheme which involved fraudulently soliciting for over $600,000 from at least 80 customers. The funds were claimed to have been placed in a pooled commodity fund claimed to use a high-frequency, algorithmic trading strategy executed by a computer trading program called “Jigsaw.”

The strategy employed was noted to be false and the performance revealed to the public was also false. Like most Ponzi scheme, profit paid out to customers was customers’ misappropriated fund.

Also, Gelfmans losses and misappropriation were concealed through the providence of fake performance result to the pool participants, which was inclusive of statements that created the appearance of positive bitcoin trading gain in contrast to the reality. Further, a fake hack was staged that caused the loss of all the customer’s fund.

The Court Ruling and the CFTC’s Thought

The court ruling entails a permanent trading and registration ban on GBI. Also the firm was ordered to pay $554,734.48 and $492,064.53 in restitution to customers and $1,854,000 and $177,501 in civil monetary penalties.

James McDonald, the CFTC’s Director of Enforcement, stated in the press release that the case marks another vital victory for the commission in the virtual currency arena. James also noted that as the string of cases shows, the CFTC is determined to identify bad actors in the virtual currency market and hold them accountable. Also, James stated that he is very grateful to the members of the enforcement virtual currency task force for their tireless work on this matter.

Meanwhile, CFTC cautions that the order requiring repayment of funds to victims may not result in the recovery of the lost money because the firm may not have sufficient fund or asset. However, CFTC is committed to combating fake and malicious acts in the cryptocurrency space.

- Advertisement -
- Advertisement -

Latest News

Bitcoin Weekly Forecast: BTC Trend Overwhelmingly Bearish

After struggling to recover above $7,300, bitcoin price started a fresh decline against the US Dollar. The price is currently...

Ethereum Price Weekly Forecast: ETH Primed For More Downsides

ETH price is trading in a bearish zone below the $142 and $146 resistance levels against the US Dollar. The price is declining and it...

 Pet Technology Unleashed! Pawtocol Launches its First IEO

 Pets will earn Universal Income by simply being pets MIAMI--(BUSINESS WIRE)--Pawtocol, the premier Blockchain company dedicated to the pet community, will launch its IEO marking...

PBExpo Announces Digital Aviation Revolutionary, GE Aviation, as Keynote for PBExpo 2020

BOCA RATON, Fla.--(BUSINESS WIRE)--#DIGITALTRANSFORMATION--PartsBase & PBExpo announced today that Chief Commercial Officer of GE Aviation Digital Solutions, Andrew Coleman, will present as a keynote...

Tezos (XTZ) Close to Hitting 2019 High; Is Correction Looming?

The price of blockchain asset XTZ came closer to establishing a record yearly high on Friday. The Tezos’ native token established an intraday peak of...