A couple of alleged fraudsters peddling a scam involving a virtual currency have been busted by the U.S. Commodity Futures Trading Commission.
The commission announced Wednesday that it had filed a complaint against people related to a scheme involving several companies.
Through a tangled arrangement involving options and a virtual currency, the people behind these outfits are accused of defrauding investors since 2014.
Let’s discuss these latest alleged bad actors.
Who stands accused?
The defendants here are Blake Harrison Kantor, who frequently uses the alias Bill Gordon, and Nathan Mullins.
The companies at issue are Blue Bit Banc, located in the United Kingdom, Blue Bit Analytics, Ltd., located in Nevis, Turks, and Caicos, and Mercury Cove, and G. Thomas Client Services, both located in New York.
The CFTC’s complaint also charges Blue Wolf Sales Consultants, a New York company owned by Kantor, as a Relief Defendant for receiving customer funds.
The CFTC’s complaint was filed in the U.S. District Court for the Eastern District of New York on April 16. On the same date, the United States Attorney for the district filed a parallel criminal action.
The charges? Operating a fraudulent scheme involving binary options and a virtual currency known as ATM Coin.
Leaving investors blue
Like so many of the schemes that are plaguing the cryptocurrency space, this one involves people who duped others into investing while hiding under the guise that were operating in some capacity as registered agents. In this case, the defendants are accused of acting as Futures Commission Merchants without being registered with the CFTC.
Once they duped investors into handing over their hard-earned dollars, the defendants used the money for their only personal needs, according to the complaint.
These defendants seemed to go to lengths not normally seen in the fraudulent schemes that have plagued the crypto space. Apparently, they tried to make their fraudulent scheme more difficult to detect by stretching it across multiple markets, including through the use of the ATM Coin.
The complaint states that defendants tried to cover up their misappropriations of funds by “inviting customers to transfer their binary options account balances into a virtual currency known as ATM Coin.”
According to the complaint, some customers agreed to transfer their funds into ATM Coin, and at least one customer sent additional money to the defendants to purchase additional ATM Coins.
Unscrupulously, the defendants lied to investors by telling them that their ATM Coin holdings were worth “substantial sums of money,” notes the complaint.
U.S. Attorney Donoghue stated:
“As alleged, Kantor used a computer program to generate manipulated data to cheat hundreds of investors out of their hard-earned savings. To cover-up his fraudulent scheme, Kantor then lied to the FBI and ordered the alteration of documents that would assist agents in identifying his victims.”
Next steps
On Tuesday, the U.S. District Court judge hearing the case entered a Restraining Order:
- freezing the defendants’ and relief defendant’s assets,
- prohibiting them from destroying their books and records, and
- granting the CFTC immediate access to those records.
The Court has scheduled a hearing for April 26, to determine, among other things, whether to enter an order for preliminary injunction against the defendants and continue the freeze on their assets.
This article appeared first on Cryptovest