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Principale » Feds sue over alleged bitcoin Ponzi scheme

Feds sue over alleged bitcoin Ponzi scheme

23 Septembre 2017

The CEO of a NY hedge fund has been charged with operating a Ponzi scheme that defrauded investors whom they had solicited to participate in a fund for trading Bitcoin.

According to the CFTC complaint, Gelfman Blueprint and Gelfman operated a bitcoin Ponzi scheme between January 2014 and January 2016 in which they fraudulently solicited over US$600,000 from approximately 80 persons who invested amounts ranging from a few hundred dollars to tens of thousands of dollars. Gelfman servers as CEO and head trader at the company and the suit claims he told investors that he ran a fund that "employed a high-frequency, algorithmic trading strategy". Legal documents state that GBI falsely claimed that, through their investment, customers could enjoy a 7-9 percent monthly increase in bitcoin.

While GBI reportedly advertised itself as the "world's largest and most advanced cryptocurrencies exchange", the company's bitcoin address allegedly shows "no bitcoin trading activity at all after early July 2015, and a bitcoin balance of zero beginning in early August 2015".

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Gelfman went as far as staging a fake computer hack to hide the losses.

"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", said James McDonald, the CFTC's director of enforcement.

He added that the CFTC will continue to "work hard to identify and remove bad actors from these markets".

Feds sue over alleged bitcoin Ponzi scheme