Federal Court Fines Trading Firm, CEO with $2.5m for Bitcoin Ponzi Scheme


Total News – Atlanta, GA 10/19/2018. A New York federal court ordered Staten Island-based Gelfman Blueprint Inc. (GBI) and its CEO Nicholas Gelfman to pay over $2.5 million for operating a Ponzi scheme.

The Commodities Futures Trading Commission (CFTC) filed the charges against GBI in September 2017.

GBI and Nicholas Gelfman solicited more than $600,000 from at least 80 investors between 2014-2016. As stated on the report, "the customers' funds supposedly were for placement in a pooled commodity fund that purportedly employed a high-frequency, algorithmic trading strategy executed by Defendants' computer trading program called "Jigsaw." In fact, as the Orders indicate, the strategy was fake; the purported performance reports were false; and—as in all Ponzi schemes—payouts of supposed profits to GBI Customers in actuality consisted of other customers' misappropriated funds."

CFTC's Director of Enforcement James McDonald commented:

"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 court ordered GBI and Gelfman to pay $554,734.48 and $492,064.53 in restitution to customers and $1,854,000 and $177,501 in civil monetary penalties. The court also imposed permanent trading and registration bans on both GBI and Gelfman.
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