CFTC Sues New York Man Over Alleged $600k Bitcoin Ponzi Scheme

The Commodity Futures Trading Commission has filed a lawsuit against a New York-based man and his company for allegedly running a bitcoin scam.

AccessTimeIconSep 22, 2017 at 3:00 p.m. UTC
Updated Sep 13, 2021 at 6:57 a.m. UTC

The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against a New York-based man and his company for allegedly running a bitcoin-based Ponzi scheme.

Nicholas Gelfman and his firm, Gelfman Blueprint Inc (GBI), are accused of procuring over $600,000 from 80 people between January 2014 and approximately January 2016.

According to the CFTC, the funds were solicited from customers under the pretence of sponsoring a high-frequency bitcoin trading algorithm called "Jigsaw." Legal documents state that GBI falsely claimed that, through their investment, customers could enjoy a 7–9 percent monthly increase in bitcoin.

However, the CFTC summarises that:

"In fact, 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."

While GBI reportedly advertised itself as the "world’s largest and most advanced cryptocurrencies exchange," the company's bitcoin address allegedly shows "no bitcoin trading activity at all after early July 2015, and a bitcoin balance of zero beginning in early August 2015."

Gelfman allegedly tried to conceal the Ponzi scheme by claiming the company had been hacked, and that all customer funds had been stolen as a result.

Speaking in a release on the agency's website, James McDonald, the CFTC's Director of Enforcement, stated that, as part of its commitment to fintech innovation, the watchdog must pay careful attention to scammers misusing bitcoin.

McDonald said of the GBI case: "As alleged, the defendants here preyed on customers interested in virtual currency, promising them the opportunity to invest in bitcoin when in reality they only bought into the defendants' Ponzi scheme."

He added that the CFTC will continue to "work hard to identify and remove bad actors from these markets."

Lady Justice image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.