Blake Harrison Kantor, operating under the alias Bill Gordon, and Nathan Mullins are facing charges of fraud related to a binary options and cryptocurrency scheme, according to a complaint filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Eastern District of New York. The complaint, filed April 16, 2018, also names Blue Bit Banc, Blue Bit Analytics, Ltd., Mercury Cove, Inc., and G. Thomas Client Services as defendants.
The CFTC alleges that Kantor, Mullins, and the associated entities operated a fraudulent scheme involving binary options and a virtual currency called ATM Coin. They are accused of acting as unregistered Futures Commission Merchants, illegally accepting customer funds. Blue Wolf Sales Consultants, a company owned by Kantor, is named as a Relief Defendant, accused of receiving customer funds related to the scheme.
On April 17, 2018, Judge Sandra J. Feuerstein issued a Statutory Restraining Order, freezing the assets of the defendants and Relief Defendant. The order also prohibits the destruction of records and grants the CFTC access to them. A hearing is scheduled for April 26, 2018, to determine if a preliminary injunction should be issued and the asset freeze continued.
A parallel criminal action has also been filed by the U.S. Attorney for the Eastern District of New York against Kantor, charging him with fraudulent conduct mirroring the allegations in the CFTC complaint (United States v. Blake Kantor aka Bill Gordon, Case No. 18 CR 177). U.S. Attorney Richard Donohue stated that Kantor allegedly used a computer program to manipulate data and defraud investors, then obstructed the investigation by altering documents and lying to the FBI.
The CFTC’s complaint details that binary options must be traded on a registered board of trade to be legally offered in the U.S., a requirement the defendants allegedly ignored. James McDonald, CFTC’s Director of Enforcement, emphasized the agency’s commitment to rooting out fraud and working with law enforcement partners, especially in cases that involve multiple markets and virtual currencies.
The investigation is ongoing, and the full extent of the losses to investors is still being determined. The CFTC is seeking full restitution for victims, civil monetary penalties, and an injunction against further violations of the Commodity Exchange Act.
Source: CFTC.gov
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