A New York federal court has ordered Nicholas Gelfman to pay $2.5 million in fines and restitution for operating a Ponzi scheme through his Staten Island, New York-based Gelfman Blueprint Inc. It’s the first bitcoin-related fraud case for the CFTC.

Between 2014 and 2016, Gelfman collected more than $600,000 from 80 investors by promising “7% to 11% monthly return on their bitcoins,” the Commodity Futures Trading Commission (CFTC) revealed in a statement.

James McDonald, the CFTC’s Director of Enforcement, said the agency will continue to crack down on scams in the decentralized, unregulated cryptocurrency market.

First Bitcoin-Related Fraud Case For CFTC

“This case marks yet another victory for the Commission in the virtual currency enforcement arena,” McDonald said. “The CFTC is determined to identify bad actors in these virtual currency markets and hold them accountable.”

Nicholas Gelfman admitted that he provided false performance reports to investors to make it seem as if his bitcoin trading was successful, when in fact, it was unprofitable.

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