Crypto Hedge Fund Fined $2.5 Million for ‘Operating a Bitcoin Ponzi Scheme’

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On Thursday, October 18th, a New York federal court has ordered cryptocurrency hedge fund Gelfman Blueprint, Inc. (GBI) and its CEO, Nicholas Gelfman, to pay a fine of over $2.5 million for operating a fraudulent Ponzi scheme.

Nicholas Gelfman, who had created a corporation by the name of Gelfman Blueprint, Inc. started operations in 2014, showed that within a year of operation it had registered 85 users and was managing 2,367 BTC.

Bitcoin hedge fund Gelfman claimed to work on an algorithm that enabled high-frequency trading. Case findings reveal that the firm fraudulently acquired $600,000 from 80 customers and went on to fake a ‘computer hack’ to conceal trading losses.

The US Commodity Futures Trading Commission (CFTC) originally came after the company in September of last year. At the time, GBI told its customers that it was using an algorithm called ‘jigsaw’ to earn substantial returns on investors’ funds.

In September 2017, the CFTC filed a federal civil enforcement action in the U.S. District Court against Defendants Nicholas Gelfman Blueprint, Inc. (GBI), charging them...

Read More: https://news.bitzamp.com/crypto-hedge-fund-fined-2-5-million-for-operating-a-bitcoin-ponzi-scheme/