Starting the month of November with a big bang! The US Commodity Futures Trading Commission (CFTC) has once again strengthened its trust with the general public as it busts four entities as well as two key players in a fraudulent binary options scheme that incorporated a shady cryptocurrency.
The case, which was filed about 7 months ago, was finally put to bed on the 1st of November. Concluding the case, the CFTC ordered all parties involved to pay over $4.45 million for fraud and misappropriation of funds.
According to the press release by the CFTC, Blake Harrison Kantor and Nathan Mullins together with four different entities – Mercury Cove Inc., Blue Bit Banc, G. Thomas Client Services, and Blue Bit Analytics Ltd – were found guilty of misappropriation of the victims’ money and conspiracy to operate a fraudulent binary scheme.
The defendants reportedly joined hands in a binary options scam involving a digital currency commonly known as ATM Coin. Per the report, the CFTC alleges:
“[T]he defendants solicited public customers to invest in binary options, promising an opportunity to be paid predetermined amounts based upon the price of the commodities at particular points in time. Although customers could trade for themselves or have a Blue Bit Banc representative do so for them, the defendants failed to inform customers that a computer software program used by Blue Bit Banc fraudulently altered data associated with their binary options investments so that the probability of investors earning a profit favored Blue Bit Banc and disadvantaged investors.”
Upon investigation, the CFTC also discovered that the defendants urged investors to send their funds to a bank account in the island nation of St. Kitts and Nevis. All in an attempt to conceal their crooked business and make it almost impossible to trace the funds.
Adding to the list of their heinous crimes, the defendants successfully mislead investors into thinking the rubbish cryptocurrency ATM Coin was worth more than nothing. After brainwashing its clients, defendants moved to convert Blue Bit Banc investments into the valueless digital coin.
Consequently, the court reached a decision, compelling the defendants to pay a total of $4.25 million.
“This included an order of restitution of $846,405 and a civil monetary penalty of $2.5 million against Kantor and the corporate entities, as well as a penalty of $300,000 against Mullins. The order also required Kantor and Mullins to disgorge ill-gotten gains of $515,759 and $89,574, respectively.”
In addition to that, a company owned by Kantor, Blue Wolf Sales Consultants, was also instructed to pay a total of $463,097.
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