Bitcoin, Crypto currency, Blockchain

The Federal court sentenced Bitcoin trading company to 2.5 million USD penalty

9adb5c931317772f7a19c85d6ae13f85 - The Federal court sentenced Bitcoin trading company to 2.5 million USD penalty

CFTC the US Commodity Futures Trading Commission won a court case against a company that has operated a snow-ball system, with a focus on Bitcoin. A New York Federal court, the New York-based Gelfman Blueprint, Inc. (GBI) and its CEO, Nicholas Gelfman sentenced to pay more than $ 2.5 million penalty and compensation. This is the first of the Commodity Futures Trading Commission (CFTC) initiated a fraud investigation because of Bitcoin.

According to a on Thursday (18. October 2018) issued a press release the CFTC, the parties, GBI and Gelfman will pay – the Affected about 2.5 million dollars in refunds and civil money penalty. Of this total, 554.734,48$, and 492.064, 53 $ of compensation, while 1.854.000 $ and 177.501 $ are civil penalties.

This judgment is in connection with a civil action brought by the CFTC of 21. By September 2017. The CFTC charges that, GBI and CEO Gelfman from about January 2014 to January 2016, a Bitcoin-Ponzi-operated model, in which they collected fraudulently more than $ 600,000 from nearly 80 people. Thus, the participation in a merged equity funds, allegedly a high-frequency, algorithm-based trading method used will be paid and there are high returns were promised. should This was supported by a computer-controlled Exchange of the defendant by the name of “Jigsaw”.

The CFTC had asked for compensation for previous pool members and the payment of profits from violations of the Commodity Exchange Act and CFTC regulations. You had civil penalties legal money, trading bans, and a strict policy for potential violations against the laws of the United States required. The CFTC said that of virtual currency, interested customers were lured under the pretext of the opportunity to invest in Bitcoin, in reality, only in the Ponzi model to the defendants.

They were still clear that all of the reports and alleged success stories are fake. As with most Ponzi models, the dividends paid to the alleged gains of the GBI customers in reality from the money stolen from other customers.

The CFTC’s Director of Enforcement Comments

James McDonald, the CFTC’s Director of Enforcement Comments, said:

This case marks another victory for the Commission in the field of virtual currencies. As this series of cases shows, is determined by the CFTC to identify malicious actors on the virtual currency markets and to take responsibility. I am to the members of the Virtual Currency Task Force of the enforcement authorities for their tireless work in these matters.

According to the court decision, the company and its CEO, to the concealment of Trading losses and the fraud of GBI, gone so far as tenders and the pool participants with false management reports. To Falsification of records, which produced the impression of the particular Bitcoin market, where it was, in fact, fakes. The court decision also made it clear that Gelfman, in order to conceal the trading losses and misappropriation of the plot, has staged an artificial Computer Hack that should cover up the loss of almost all customer deposits.

The CFTC also has noted that injunctions that require the repayment of money to the Concerned, may not necessarily lead to the return of money, because the Criminal may not have sufficient funds or assets. In addition, they stated that they will continue to work actively for the safety of consumers and ensure that the law breakers held accountable. She also appreciated the help and support of the public Prosecutor’s office of the County of New York and the Finnish financial Supervisory authority.

The purpose of the Commodity Futures Trading Commission (CFTC) is clear, honest, competitive, and provide financial support for fair markets. A few days ago Brian Quintenz, a Commissioner of the CFTC, had warned that programmers of Smart Contracts prior to the anticipatory Code. He said that Smart Contracts are controlled, so that developers can modify to upcoming events to predict. Smart Contracts are the applicability of which is almost limitless, to the extent that you even to the reproduction of traditional financial instruments can be used.

He had explained that the Smart Contract applications have the potential to open up new markets and change existing markets. They also promote different issues of accountability. It was found in various cases it is clear that the Code developers are supported violations of the CFTC rules and promoted. Therefore, you can keep track of these individuals because of their misconduct, a criminal.

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This article was from English into German:

Christian Rehm

Senior IT Consultant and Crypto Enthusiast always in search of interesting news.

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