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Feds announce notable bitcoin-linked fraud outcome

The federal Commodity Futures Trading Commission is clearly sounding its horn a bit via comments it recently put forward concerning a fraud-related action. The CFTC spotlighted earlier this month its first-ever anti-fraud enforcement action targeting the virtual currency Bitcoin.

Although not at the pinnacle of fraud outcomes in terms of magnitude or the penalties featuring in the case, the just-concluded civil action against investment company Gelfman Blueprint, Inc., is justifiably notable for its Bitcoin-aimed focus.

Authorities stress that illegalities engaged in by GBI and its founder Nicholas Gelfman were in a nutshell nothing more than customary Ponzi scheme stratagems aimed at deceiving investors by disguising losses as gains. GBI reportedly covered up an adverse balance sheet by providing its investors and would-be buyers with false data. That information pointed to success that a CNN article on the scam stresses was flat-out fiction, with actual records indicating “only a few trades and customer losses – not profits.”

The company and its principal will now pay for that in a most literal sense. GBI and Gelfman in his individual capacity have been ordered to come up with more than $2.5 million to cover fraud-related penalties and make restitutionary payments to harmed investors.

We make the pointed remark on a website page addressing Ponzi schemes at Hilder & Associates that “the frequency of prosecutions in this area is increasing and [that] the penalties are severe.” The proven defense attorneys at our established Houston law firm provide the strong legal advocacy that individuals facing charges in criminal and/or civil matters need and are constitutionally entitled to.

We welcome contacts to the firm from parties seeking additional information.

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If you or your company is under investigation, charged or indicted for federal or state crimes, or you want to ensure future compliance, contact Hilder & Associates, P.C., for more information or to schedule an appointment with an experienced Houston white collar criminal defense lawyer.

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