The Commodity Futures Trading Commission (CFTC) filed a suit against Gelfman Blueprint back in September a year ago along with founder Nicholas Gelfman, in the US District Court of the Southern District of NY. (GBI) and its CEO Nicholas Gelfman, noted that it was the first suit of its kind, of a scam involving BTC, filed by the agency, back in September 2017.
The firm was always the target when it comes to the company conducting fraud schemes to dupe their customers in believing that they are actually receiving profits and would, therefore, want them to trade with them too.
To hide the trading losses and misappropriation of customer money, the firm faked a computer hack in October 2015 that supposedly wiped out most customer funds.
The CFTC's Director of Enforcement, James McDonald welcomed the court decision claiming it as "another victory" in the "virtual currency enforcement arena".
Apart from the monetary penalties, the court also banned permanently GBI and Gelfman from trading.
GBI and Gelfman were ordered to pay $554,734.48 and $492,064.53 respectively in restitution to customers and $1,854,000 and $177,501 in civil monetary penalties.
That being said, the CFTC noted in its release that the scheme's victims may not recover any of their lost funds as it is possible Gelfman and GBI will not have sufficient liquidity to pay the restitution or penalties. Furthermore, he added, "As this string of cases shows, the CFTC is determined to identify bad actors in these virtual currency markets and hold them accountable".
The Commission's Virtual Currency Task Force led the investigation against GBI and Gelfman. The CFTC said it will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The fraud was able to solicit over $600,000 from at least 80 customers.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.