Earlier today, in federal court in Central Islip, Blake
Kantor, who formerly operated a binary options company known as Blue Bit Banc
and Blue Bit Analytics (“BBB”), was sentenced by United States District Judge
Sandra J. Feuerstein to 86 months’ imprisonment for operating a scheme to
defraud BBB investors, and BBB investors who also invested in a cryptocurrency
known as “ATM Coin,” to be followed by three years’ supervised release. Kantor was also ordered to pay restitution of
$806,405 to the victims of his crime, forfeiture of $1.5 million, and
forfeiture of approximately $153,000 of stolen proceeds. In November 2018, Kantor pleaded guilty to
conspiracy to commit wire fraud, and as part of his plea agreement, he admitted
to obstructing the government’s investigation.
Richard P. Donoghue, United States Attorney for the Eastern
District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge,
Federal Bureau of Investigation, New York Field Office (FBI), Jonathan D.
Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal
Investigation, New York (IRS-CI), and James McDonald, Director, Division of
Enforcement, U.S. Commodity Futures Trading Commission (CFTC), announced the
sentence.
“Kantor has been held accountable for defrauding investors
through his lies and deceit,” stated United States Attorney Donoghue. “This Office and our law enforcement partners
will continue to vigorously prosecute those who perpetrate financial frauds and
obstruct investigations of their crimes.”
“Mr. Kantor has
rightfully been punished for making promises he knew would not be kept. IRS-Criminal Investigation is committed to
apprehending those who create elaborate schemes that have no purpose other than
to mislead investors by defrauding them for personal gain,” stated IRS-CI
Special Agent-in-Charge Larsen.
“The CFTC is committed to working vigorously to root out
fraud in all of our markets, including those involving virtual currencies,”
stated CFTC Director McDonald. “As this
parallel action shows, we will continue to work with our law enforcement
partners to ensure that those who engage in this sort of misconduct are
identified and held accountable. I am
grateful to the U.S. Attorney and his team for their work on this important
case.”
In March 2014, Kantor established BBB, and from
approximately 2014 to 2017, he and others solicited and received approximately
$1.5 million from more than 700 investors in BBB’s binary options. Kantor told investors that they could place
binary option trades, or a BBB representative could do so for them, and that
the predetermined profits promised them would be based on the actual prices of
securities, currencies and other investments at particular points in time. However, Kantor did not inform the investors
that a BBB computer software program fraudulently altered data associated with
binary options investments, so that the probability of investors earning a
profit favored BBB and disadvantaged investors.
Kantor also fraudulently persuaded several BBB investors’ to convert
their BBB investments into “ATM Coin,” a worthless cryptocurrency that he told
investors was worth as much as $600,000.
In October 2017, after FBI agents informed Kantor that they
were investigating his involvement in binary options, Kantor directed a
co-conspirator to alter BBB customer lists.
Around the same time, Kantor deleted emails related to his scheme. When interviewed by the FBI, Kantor falsely
stated that he had not been involved in binary options since August 2013.
The government’s case is being handled by the Office’s Long
Island Criminal Division. Assistant
United States Attorneys Bradley T. King and Madeline M. O’Connor are in charge
of the prosecution.
The Defendant:
BLAKE KANTOR (also known as “Bill Gordon”)
Age: 44
Fort Lee, New Jersey
E.D.N.Y. Docket No. 18-CR-177 (SJF)
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