On Wednesday, the US Commodity Futures Trading Commission (CFTC) announced that it had filed a lawsuit against several people accused of organizing cryptocurrency fraud. This is reported by Cryptovest.
A well-considered fraudulent scheme, using options and crypyocurrencies, has been in effect since 2014. Several companies participated in it.
The defendants in the suit are Blake Harrison Kantor, who used the pseudonym Bill Gordon, and Nathan Mullnis.
The companies in question are Blue Bit Banc (Great Britain), Blue Bit Analytics (St. Kitts and Nevis, Turks and Caicos), as well as Mercury Cove and G. Thomas Client Services (both located in New York).
As the nominal defendant in the suit CFTC stands the New York company Blue Wolf Sales Consultants, which belongs to Kantor. This firm received clients' money.
Defendants are accused of organizing a fraudulent scheme using binary options and a virtual currency called ATM Coin.
As in many other fraudulent schemes that flooded the crypto-space, in this situation, once again people, under the guise of outwardly presentable companies, deceived other people's investments. In the suit defendants, among other things, are accused of acting as authorized futures intermediaries, but the CFTC was not registered.
According to the lawsuit, having received the investors' funds, the defendants used them exclusively for personal purposes.
Respondents tried to complicate the discovery of their scheme, distributing it across several markets, and using ATM Coin.
The suit also states that the defendants tried to hide the misappropriation of client funds, "urging customers to transfer funds from their binary-option accounts to the virtual currency of ATM Coin."
According to the lawsuit, some customers agreed to transfer their funds to ATM Coin, and at least one customer even transferred additional money to the defendants to buy ATM Coin tokens.
The lawsuit also notes that the defendants shamelessly lied to their investors, saying that their savings in ATM Coin are "huge sums of money."
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.
On Tuesday, the District Judge, who heard the case, wrote out an injunction that:
- It freezes the assets of the defendants and the nominal defendant;
- Prevents them from destroying their books and records;
- Allows the CFTC to immediately access these records.
The next hearing is scheduled for April 26 to determine, among other things, whether to apply to the defendants a temporary injunction and extend the freezing of their assets.