Reports from the US Department of Justice say that Blake Kantor, a New York resident has misled investors about a cryptocurrency as part of a broader investment fraud scheme.
Blake Kantor, also known as Bill Gordon has been charged with a conspiracy to commit wire fraud, obstruction of an official proceeding and making false statements to Special Agents of the FBI. He was arrested on 16th April 2018 by the federal authorities and faces about 20 years in prison.
The federal allegations are that in 2014 Blake established a company known as Blue Bit Blanc (BBB) that sold binary options. He used approximately $10,000 drawn from a bank account established at a TD Bank within New York State to establish BBB. From 2014 to 2017 he took about $2.1 million from approximately 713 investors. However, a computer software used by BBB allowed the company to fraudulently alter data associated with binary options investments so that the probability of investors earning a profit favored BBB and disadvantaged investors.
Further going down the rabbit hole, Kantor directed the opening of bank accounts, including one in the island nation of St. Kitts and Nevis, using aliases and the identifying information of other people. Kantor further converted monies that investors invested into ATMCoin.
IRS-CI Special Agent-in-Charge Robnett stated: “The allegations outlined in this indictment detail acts of deceit and offshore money movement in the evolving world of cryptocurrency, which impacts the trust investors have with our financial system.”
The Department of Justice noted that the charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. It is yet to be seen if Blake is actually guilty or it is a witch-hunt against crypto entrepreneurs.