Just as I thought the era of scandalous clickbait news was about to come to an end for mainstream business news, here's an excellent piece from Business Insider to bring me back to reality. Forget that USD is still the currency of choice for the "mafia" and ransom. Forget that the ponzi had nothing to do with what Bitcoin is (trading scheme no less, isn't that all about using a centralised system made possible by speculation on fiat?). Hope someone politely informs the journalist that Bitcoin isn't anonymous. How do you think dark markets got rounded up and shut down?
P.S. Staged hacks are the favourite deus ex machina for scammers now huh.
Topic: [2017-09-21] A trader is being accused of running a bitcoin Ponzi scheme (Read 2741 times)
September 22, 2017, 02:48:09 AM
September 22, 2017, 12:14:36 AM
How do people think they will get away with this, it must get very stressful trying to find money to pay the previous investors. Maybe he tried his hand at trading and bought high/sold low and tried to cover up his tracks - also a bit of media scaremongering at the end there, "Bitcoin - used by ponzi schemes, the mafia and hackers". Don't you just love them?
I just laugh seeing Mafia, Hackers and bitcoin in one sentence. LOL.
Just like any ponzi scheme, he is just using the money of the newest investors to pay the old investors. Or maybe he really do some trading stuff with those money and the profit went to whoever investors he needs to pay that time. But we all know that it won't last, so as per article to try to cover his tracks by staging a hack. Anyone here though "Jigsaw" software that's suppose he used to do trading?
September 21, 2017, 10:13:31 PM
How do people think they will get away with this, it must get very stressful trying to find money to pay the previous investors. Maybe he tried his hand at trading and bought high/sold low and tried to cover up his tracks - also a bit of media scaremongering at the end there, "Bitcoin - used by ponzi schemes, the mafia and hackers". Don't you just love them?
September 21, 2017, 10:07:40 PM
The US Commodity Futures Trading Commission said Nicholas Gelfman, a Brooklyn resident and head trader at Gelfman Blueprint, a New York-based firm, "fraudulently solicited" $600,000 from 80 clients in a bitcoin Ponzi scheme.
Investors, according to a release from the CFTC Thursday, gave money to Gelfman "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," the CFTC said.
Gelfman covered up the scheme by "staging" a hack.
Since transactions on bitcoin's blockchain network are decentralized and anonymous, the cryptocurrency provides an attractive option for criminals looking to conduct business outside of the watchful eye of government officials.
The Italian mafia has used bitcoin to launder money for its illicit activities, for instance, and the notorious WannaCry hackers extorted over $140,000 worth of the cryptocurrency from their malware victims.
http://markets.businessinsider.com/currencies/news/bitcoin-ponzi-scheme-accusation-cftc-2017-9-1002403148
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