Crypto hedge fund Gelfman Blueprint, Inc. (GBI) and its CEO, Nicholas Gelfman is ordered by the court to pay more than $2.5 million for their Ponzi scheme.
Gelfman Blueprint, Inc. (GBI), a New York-based firm founded by Nicholas Gelfman is ordered by the court to pay more than $2.5 million, following a lawsuit from the US Commodity Futures Trading Commission (CFTC) for defrauding investors.
The lawsuit, which is filed in September 2017, accused GBI and his CEO for conducting a Ponzi scheme from 2014 to 2016 by promoting Jigsaw, an inexistent computer algorithm that they claimed to have the capability of giving significant returns via a commodity fund.
The fraudulent strategy managed to allure 85 investors and gained as many as 2,367 BTC. After a while, GBI announced a fake hack that they claimed to have caused the loss of all the investors’ fund.
From the total of $2.5 million penalty, around $1 million is used to restitute the investors, while the remaining is for civil monetary penalties, as reported by Cointelegraph.
The CFTC’s Director of Enforcement, James McDonald welcomed the court decision claiming it as "another victory" in the "virtual currency enforcement arena". Furthermore, he added, "As this string of cases shows, the CFTC is determined to identify bad actors in these virtual currency markets and hold them accountable."