Bitcoin fund fined $2.5 million

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Bitcoin fund fined $2.5 million
Bitcoin fund fined $2.5 million

New York federal court fined hedge fund Gelfman Blueprint Inc along with its CEO Nicholas Gelfman for $ 2.5 million.

According to local media, the fund organized a Ponzi scheme, that is, a fraudulent scheme, according to which customers are promised high returns and minimal risk.

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According to the information on the company’s website, in 2015, the fund had 85 customers. The fund managed a total of 2367 bitcoins.

Last September, the US Commodity Futures Trading Commission (CFTC) already accused Gelfman Blueprint Inc of fraud and found evidence of a Ponzi scheme.

In the period from 2014 to 2016, representatives of the company informed their customers that they have a computer algorithm – Jigsaw. Using this algorithm, investors allegedly could make a big profit. However, there was no such algorithm. The company needed only to persuade investors to invest in the fund.

According to the indictment quoted by American journalists, the entire management of the fund lured people about 600 thousand dollars, from about 80 investors.

In addition, the company reported a non-existent computer hacking. This was supposed to help hide the loss of money.

According to James McDonald, director of law enforcement at the US Commodity Futures Trading Commission, this case demonstrated another CFTC victory. And it shows the plans of the regulator to fight fraudsters.