Crypto Fund To Pay $2.5 Million Penalties For Using Fraudulent Schemes
The cryptocurrency hedge fund called Gelfman Blueprint (GBI) and its head Nicholas Gelfman should pay a $2.5 million fine and damages for using financial schemes. They will follow a decision by the New York Federal Court, as declared in the official order on the website of the Commodity Futures Trading Commission (CFTC).
The court order was issued as part of the coercive measures that the American CFTC has been taking against Gelfman Blueprint and its head since 2017. The company is accused of deceiving investors and using fraudulent schemes during two years.
GBI was registered as a hedge cryptocurrency fund in 2014. A year later, the fund already managed assets equal to 2367 bitcoins, and attracted 85 investors as its clients, according to the company's website.
The firm suggested the depositors to work on the Jigsaw computer algorithm. According to the team members, it provided significant returns via a commodity fund.
Thus, GBI, headed by Nicholas Gelfman, lured more than $600,000 from investors via the financial pyramid and later conducted a fake hacker attack to hide the diversion of funds.
The defendants are ordered to pay about $2.5 million, with more than $1 million as the compensation for customers’ losses.
Earlier, the case of the BitConnect scam project progressed in court. Lawyers combined several complaints in a big lawsuit against the company.