US Govt seeks 70-87 months imprisonment sentence for binary options and crypto fraudster Blake Kantor

Maria Nikolova

During the nearly three years that he operated a binary options and cryptocurrency fraud scheme, Kantor stole some $1.5 million from US investors.

The United States Government is seeking a heavy prison sentence for Blake Kantor, who has pleaded guilty to charges of wire fraud based upon his fraudulent binary options and cryptocurrency scheme.

On Monday, May 13, 2019, the US Government filed a Sentencing Memorandum with the New York Eastern District Court. The document, seen by FinanceFeeds, is in connection with the defendant’s sentencing, which is currently scheduled for May 30, 2019 at 11:15 a.m.

The Government notes that, during the nearly three years that he operated a binary options and cryptocurrency fraud scheme, the defendant stole approximately $1.5 million from hundreds of investors from across the United States. Kantor perpetrated his scheme after having already been sentenced to 36 months’ imprisonment based upon his involvement in an ecstasy distribution organization.

The Government hence asks the Court to sentence the defendant to a substantial sentence of imprisonment within the Sentencing Guidelines range of between 70 and 87 months.

Between approximately March 2014 and November 2017, Kantor operated Blue Bit Banc and Blue Bit Analytics, which marketed binary options to US customers. The defendant and his entities used a type of computer software that manipulated binary options outcomes to the victims’ disadvantage. Through the use of this software, Kantor fraudulently altered the data associated with binary options investments so that the probability of those investments earning a profit would favor the defendant and his entities, and not the victims. This manipulation ultimately resulted in significant financial losses to the victims.

To cover up his scheme, the defendant had other individuals establish bank accounts that investors’ funds were wired to. One of the defendant’s bank accounts was located on the island of St. Kitts and Nevis. Ultimately, the defendant used these accounts to defraud investors of approximately $1.5 million.

As a part of the scheme, the defendant also marketed a type of cryptocurrency known as ATM COIN or “ATMC.” To induce investors to convert monies that they had invested with the defendant into ATMC, the defendant falsely told investors that ATMC was worth substantial sums of money, in one case as much as $600,000. In reality, however, ATMC was worthless and was not convertible to United States currency or any other actual currency.

Although the defendant blames his fraud on drug abuse, the calculated nature and sophistication of his scheme belie that claim, the US Government says. In any event, the fact that Kantor organized this scheme after having served a federal prison sentence for his involvement in drug trafficking conspiracy, is a factor that, according to the Government, supports the imprisonment sentence suggested.

Moreover, the calculated nature of the defendant’s scheme is demonstrated by his actions after the FBI contacted him in connection with grand jury investigation. His initial response to the FBI agents’ inquiry was to order a co-conspirator to alter lists containing victims’ contact information to conceal his scheme. Then the defendant further obstructed the grand jury investigation by deleting emails and lying in a proffer. This obstructive behavior, the Government argues, further demonstrates that a Guidelines sentence of imprisonment is proper in this case.

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