CFTC action against Blue Bit Banc put on hold, criminal case continues

Maria Nikolova

The asset freeze, however, shall stay in place pending a final resolution of the civil case which targets several entities engaged in fraudulent virtual currency and binary options offering.

The civil case against Blake Kantor, Nathan Mullins, Blue Bit Banc, Blue Bit Analytics, Ltd., G. Thomas Client Services, and Blue Wolf Sales Consultants, accused of perpetrating a binary options and virtual currency fraud, has been put on hold amid a developing criminal case.

Late last week, Judge Sandra J. Feuerstein of the New York Eastern District Court ordered that the civil case brought by the United States Commodity Futures Trading Commission (CFTC) is stayed and administratively closed with leave to reopen within 45 days after Blake Kantor enters a plea or there is a verdict at the trial of his related criminal case.

The CFTC, however, shall be permitted to continue to receive and review documents obtained from third party subpoenas already issued. The regulator will also be permitted to file a Motion seeking the Court’s assistance through a Request for International Judicial Assistance to obtain records from the Bank of Nevis in Turks and Caicos for the Blue Bit Analytics, Ltd. account. The CFTC is also permitted to issue a survey to Blue Bit Banc investors to verify their investments with the defendants.

The asset freeze imposed on the defendants shall stay in place pending a final resolution of this civil case. Also, during the stay, the Permanent Injunction Order remains in full force.

Under the Permanent Injunction, the defendants are ordered to take down all internet websites used by them to advertise, market, promote or offer for sale any transactions involving “commodity interests” and related services and to withdraw the registration for all domain names for such websites, including, but not limited to, any websites promoting binary options or virtual currency investments and the website identified as: www.bluebitbanc.com.

The defendants and persons associated with them are also are prohibited from refusing to permit authorized representatives of the CFTC to inspect and copy, when and as reasonably requested, any books, records, or other documents of the defendants. In addition, they are prohibited from destroying, mutilating, concealing, altering, or disposing of, in any manner, any books, records, or other documents of the defendants.

The defendants and each firm, corporation, or other person or entity with notice that holds any accounts, funds, assets, or other property of the defendants is prohibited from directly or indirectly withdrawing, transferring, removing, dissipating, concealing, assigning, pledging, encumbering, disbursing, converting, selling, or otherwise disposing of, in any manner, any funds, assets, or other property of the defendants.

The defendants are accused of having solicited potential customers through emails, phone calls, and a website to purchase illegal off-exchange binary options via companies such as Blue Bit Banc. The defendants sought to cover up their misappropriation by inviting customers to transfer their binary options account balances into a virtual currency known as ATM Coin. The scam allegedly started in April 2014.

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