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Screenshot of a breaking news alert e-mail from Q2 2017
As reported by Frank Chaparro at Business Insider, Nicholas Gelfman, a head trader at Gelfman Blueprint, a company based in New York, solicited $600,000 from around 80 clients, essentially forming a Ponzi scheme with Bitcoin.
According to CFTC, certain investors came in to Gelfman firm, gave him money “for placement in a pooled commodity fund that purportedly employed a high-frequency, algorithmic trading strategy, executed by Defendants’ computer trading program called “Jigsaw.”
“In fact, as charged in the CFTC Complaint, the strategy was fake, the purported performance reports were false, and — as in all Ponzi schemes — payouts of supposed profits to GBI Customers in actuality consisted of other customers’ misappropriated funds.”
That can further pose a question on the viability of Bitcoin, as most digital cryptocurrencies are anonymous and decentralized, so it has been known that criminal activity can be “put through” Bitcoin transactions. It is the blockchain technology that makes it difficult for regulations to track and capture criminal activity.