The U.S. Commodity Futures Trading Commission (CFTC) is suing a New York man and his company over an alleged bitcoin Ponzi scheme.

The CFTC says that Nicholas Gelfman of New York and Gelfman Blueprint, Inc., "fraudulently solicited more than $600,000 from approximately 80 persons."

According to the agency Gelfman preyed on those interested in investing in his bitcoin fund where he "employed a high-frequency, algorithmic trading strategy.", however instead of obtaining bitcoin or any investment of any such sort, investors only funded a Ponzi scheme.

It's very much like the multitude of scams we've warned about time and time again. They're either a Ponzi or a Nonzi and it never ends well.

"The purported performance reports were false, and -- as in all Ponzi schemes -- payouts of supposed profits ... actuality consisted of other customers' misappropriated funds," said the CFTC.

Typical of these schemes instead of bitcoin or any returns the only thing anyone saw was either a small amount of other investors misappropriated funds, or a notice of a "computer hack" staged by the defendant.

Article by dinbits
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