Hedge fund Gelfman Blueprint Inc. and in particular, the CEO, Nicholas Gelfman, were fined $2.5M for misappropriating clients' money.
According to the CFTC, “defendants Gelfman and GBI, by and through its officers and agents and employees, operated a Bitcoin Ponzi scheme in which they fraudulently solicited more than $600,000 from at least 80 customers.”
Gelfman Blueprint announced to its customers that it uses the “jigsaw” algorithm to make a significant profit from investor funds. It turned out that the algorithm was fake, and the income that some investors received was made up of illegally appropriated funds from other investors. As a result, almost all investor funds disappeared.
Federal Court in New York appointed a $2.5 million fine for Gelfman and GBI. About $1 million will be returned to investors, the rest of money are civil monetary penalties.
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