A US federal court ordered a New York company to pay $2.5 million in fines and restitution for running a Ponzi scheme that scammed at least 80 people, who thought they were investing in bitcoin. The Commodity Futures Trading Commission (CFTC) took action in this first ever ant-fraud bitcoin related case in September 2017. The court ruled that Gelfman Blueprint Inc. and its CEO Nicholas Gelfman solicited more that 600 000 USD from retail investors between 2014 and 2016 by claiming their funds were part of an algorithmic trading strategy.
Two months back I caught out a similar small scale coin racket in Colombia a friend asked me to once over. 7-9 % monthly return promised just like these guys. I had a look at waybackmachine for their alleged 3 years of going from coding to trading and of course they had set it to not allow wayback to archive. Also anonymous domain reg. Did not take long looming over the guy to get him to admit it was the start of a Ponzi and the posted results were fake. "Mr. Gelfman told investors that Gelfman Blueprint was able to get consistent returns through high-frequency bitcoin trading, the complaint said. In reality, the CFTC claims, the company used money from newer investors to pay back prior investors while also setting up online portals with false performance reports. According to the complaint, the company reported it had 2,367 bitcoins in assets under management, worth about $660,000 in August 2015. However, the CFTC said in the complaint, the company had a balance of less than 270 bitcoin as of July 2015 and completed no bitcoin trading after early July 2015. The CFTC said Gelfman Blueprint had a bitcoin balance of zero beginning in August 2015. The company obtained more than $600,000 from at least 80 investors from January 2014 through January 2016, the complaint said."
There have been so many crypto scams, some, many, of them nothing more than blatant in-your-face ponzi schemes, that I am upset and surprised that the feds aren't taking them down faster and more frequently... nice to see something, but need more if the crypto market is ever to be truly credible/viable.