The Commodity Futures Trading Commission has accused a New York company of operating a bitcoin-related Ponzi scheme, in the regulator’s first fraud-related action involving the cryptocurrency, the Wall Street Journal reported today. In a civil complaint filed yesterday in U.S. District Court in Manhattan, the CFTC charged Gelfman Blueprint Inc. and its chief executive, Nicholas Gelfman, with fraud, misappropriation, and issuing false account statements in connection with solicited investments in bitcoin. In recent years, central bankers and regulators have increased warnings about bitcoin and other virtual currencies, due to rising prices, increased trading volumes and a larger number of virtual currency-related ventures. Chinese regulators earlier this month ordered digital-currency exchanges to wind down their operations in China, in a bid to reduce risk in a wave of technology-driven finance. Gelfman told investors that Gelfman Blueprint was able to get consistent returns through high-frequency bitcoin trading, the complaint said. In reality, the CFTC claims, the company used money from newer investors to pay back prior investors while also setting up online portals with false performance reports.
