Prosecutors: Options Seller Duped Investors With 'Worthless' Crypto

Federal prosecutors say a New York resident misled investors about a cryptocurrency as part of a wider investment fraud scheme.

The U.S. Attorney's Office for the Eastern District of New York said Monday that Blake Kantor, also known as Bill Gordon, was being charged with conspiracy to commit wire fraud, making false statements and obstruction of an official proceeding in connection with a binary options investment platform he founded called Blue Bit Banc.

The company, officials said, allegedly manipulated its investor data "So that the probability of investors earning a profit favored BBB and disadvantaged investors," according to statements.

According to the Attorney's Office, Kantor pitched investors on an "ATMCoin" and converted investor funds into the cryptocurrency.

"To further the scheme, 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," Monday's statement reads.

"Kantor further converted monies that investors invested into ATM Coin, a worthless cryptocurrency that Kantor misleadingly told investors was worth substantial sums of money."

Through the scheme, Kantor allegedly raised $2.1 million from more than 700 investors over a three-year period.

During the government's investigation, Kantor allegedly claimed that he had no involvement with binary options, and he was also accused of "[directing] a co-conspirator to alter lists of BBB customers after FBI agents informed Kantor that they were investigating his involvement in binary options.

"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," he added.

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