Founder Of ATM Coin And Blue Bit Banc Gets 86 Months in Prison and $4.5 Million of Fines for Fraudulent Binary Options Scheme

November 5, 2019 / by Crypto.IQ

The United States Commodity Futures Trading Commission (CFTC) brought the hammer down on Blake Harisson Kantor, Nathan Mullins and five related corporations including Blue Bit Banc, Blue Bit Analytics, Mercury Cove, Blue Wolf Sales Consultants, and Thomas Client Services. 

Apparently, the defendants solicited investors to buy binary options, where investors would be paid predetermined amounts based on the value of commodities at particular points in time. Unknown to investors, a program operated by Blue Bit Banc fraudulently altered the data so that investors were disadvantaged and Blue Bit Banc would make guaranteed profits. 

Further, investors were told to send deposits to the Caribbean nation of St. Kitt and Nevis, making it harder to trace where the money went, and essentially amounting to wire fraud and money laundering. 

It gets worse. The defendants acted as Futures Commission Merchants, even though they never registered with the CFTC, and this really drew the ire of the CFTC.

Finally, all investor funds were converted to a worthless cryptocurrency called ATM Coin. Indeed, ATM Coin is not listed on any cryptocurrency exchange nor on CoinMarketCap, so it truly is valueless. 

The CFTC has ordered restitution of $846,000, a civil penalty of $2.5 million against Kantor and the involved corporate entities, a $300,000 civil penalty against Mullins, a disgorgement of ill-gotten gains from Kantor and Mullins of $515,000 and $90,000 respectively, and a disgorgement of $463,000 from Blue Wolf Sales Consultants which is owned by Kantor. 

In total there are $4.5 million of fines, although the CFTC notes that not all of this may end up getting paid, since it depends on how much money they can get from the defendants. However, Kantor has pleaded guilty to wire fraud and obstructing an investigation and is going to prison for 86 months.