ATM Coin Part of Binary Options Fraud by Blue Bit Banc, CFTC Order Freezes Assets
Last week a new cryptocurrency called ATM Coin was involved with CFTC charges against a Binary Options fraud scheme by Blue Bit Banc and other entities. Blake Kantor, aka Bill Gordon, and Nathan Mullins along with companies Blue Bit bank, Blue bit Analytics, Ltd., Mercury Cove, Inc., G. Thomas Client Services and Blue Wold Sales Consultants are charged with defrauding investors and using ATM Coin virtual currency to cover up their tracks.
Since before April 2014, Kantor and defendants solicited investors through phone calls and emails to purchase illegal Binary Options. They claimed to be Futures Commissions Merchants (FCMs) but were never registered with the Commodities Futures Trading Commission as FCMs. Binary Options are bets on transactions based on future commodity prices as predicted to rise or fall. Binary Options can only be traded on registered board of trade, making Kantor and his associates in violation of the law. They promised high returns on investment backed by Kantor’s claims of previous success. The complaint states that the defendants misappropriated the investors’ funds for personal use.
To cover their tracks, Kantor and company encouraged investors to convert their binary options into ATM Coin cryptocurrency assets. Some of their costumers agred to convert their investments into ATM Coin, and other even sent more money for them to invest into ATM Coin. By manipulating data with computer programs, Kantor projected the investors ATM Coins were worth substantially more. U.S Attorney Richard Donohue claims that they “cheated” hundreds of investors out of their savings. He continue to explain Kantor lied to the FBI and altered the documents that would reveal their scheme. The CFTC seeks to refund defrauded investors by disgorging the defendants of their cheated gains, and order civil monetary penalties for violating the Commodity Exchange Act and regulations.
Federal judge Sandra J. Feuerstein entered a restraining order freezing the defendants assets and giving the CFTC immediate access to their records. The order prohibited the defendants from destroying or altering their books and records, and to provide the CFTC all passwords and identification numbers to access their smartphones and bank accounts. The order will remain in effect until May 1st 2018. Shortly before, a U.S Attorney of New York charged Kantor with a criminal action subject to CFTC’s jurisdiction in the case United States v. Blake Kantor aka Bill Gordon, Case No. 18 CR 177 (E.D.N.Y.).CFTC Director of Enforcement, James McDonald, stated in a press release,
“As this action shows, the CFTC is continuing its efforts to root out fraud in our markets. To achieve this goal, we will work closely and in parallel with our law enforcement partners, which is particularly important in cases like this one, where the Defendants allegedly sought to make their fraudulent scheme more difficult to detect by stretching it across multiple markets, including a virtual currency known as ATM Coin.”
The original CFTC order detailing this information can be found here.
The Commission has issued various advisories on the risks of investing in virtual currency such as ATM Coin and continuous to prosecute fraudulent Bitcoin and cryptocurrency schemes.