US Crypto fraudster is fined and sent to prison

A man from the US who defrauded cryptocurrency investors to the tune of over a million US dollars has been sentenced to 86 months in prison.

Blake Kantor, who operated a scheme called “ATM Coin”, was found to have brought in so-called investments from over 700 people.

They were purchasing “binary options”, a widely discredited investment format. Kantor’s firms, known as Blue Bit Banc and Blue Bit Analytics (BBB) gave investors promises that a certain profit level would be reached.

He pledged that the amounts they would receive would be based on the value of those commodities generally.

However, in reality, BBB was operating a software package which changed the information powering the system and created a situation in which BBB was more likely to turn a profit than the investors were.

He also erased information which pertained to the ATM Coin scheme once he knew he was being investigated, in conjunction with a colleague.

Kantor, who is aged 44 and is based in Fort Lee in the US state of New Jersey, was also known as Bill Gordon.

His crimes are believed to have occurred during a three year period after he founded the firm in March of 2014.

He submitted a guilty plea to the court in November of last year on a count of conspiracy to commit wire fraud. He also pled guilty to blocking an investigation by the government.

He will also spend three years on supervised release once his sentence is over. He has been given an order to pay restitution of $806,405 to those who fell victim to his fraud.

He will also have to forfeit over a million dollars.

In a statement, the Internal Revenue Service’s Jonathan Larsen described Kantor’s behaviour towards investors as “defrauding them for personal gain”.

“Mr. Kantor has rightfully been punished for making promises he knew would not be kept. IRS-Criminal Investigation is committed to apprehending those who create elaborate schemes that have no purpose other than to mislead investors by defrauding them for personal gain”, he said.

James McDonald, who is the Enforcement Director of the US Commodity Futures Trading Commission, took the opportunity to emphasise that the CFTC would continue to fight fraud.

“The CFTC is committed to working vigorously to root out fraud in all of our markets, including those involving virtual currencies”, he said.

“As this parallel action shows, we will continue to work with our law enforcement partners to ensure that those who engage in this sort of misconduct are identified and held accountable. I am grateful to the U.S. Attorney and his team for their work on this important case.”

The prosecution case was complex, and several agencies were involved in the matter. The Long Island Criminal Division of the US Attorney’s Office prosecuted the case.

The Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS) and the CFTC were also involved.

The prosecution took place at a court in Central Islip in New York.

Nigel Frith

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