Nicole D. Prysby, Senior Attorney, National Legal Research Group

            The price of Bitcoin has soared in recent months, from approximately $900 in January 2017 to a current price of over $15,000. But even before the 2017 increase, Bitcoin had periods where its value rose sharply. For example, in 2013, it went from about $15 to $800. Bitcoin’s short-term gains have made it a very attractive hook for would-be Ponzi scheme developers. In fall 2017, the Commodity Futures Trading Commission (“CFTC”) sued Gelfman Blueprint, Inc. (“GBI”), and GBI’s Chief Executive Officer (“CEO”) for operating a Bitcoin Ponzi scheme that allegedly defrauded investors out of more than $600,000.

            In early 2014, the company’s CEO opened a Bitcoin fund and sought customers. He claimed to have a high-frequency, algorithmic, trading strategy (using a bot named “Jigsaw”) and advertised the fund as having monthly returns of 7%-11% with zero downside risk because “trading results are maximized during price drops.” He was able to attract at least 80 customers, who contributed between a few hundred dollars and tens of thousands of dollars each.

     The federal Gun Control Act (18 U.S.C. § 922(g)) prevents gun ownership by individuals who HAVE BEEN involuntarily committed to a mental institution. There is a process for having rights restored; currently 31 states participate in a program which permits a state court, board, or commission to create a relief program. Clifford Charles Tyler lives in Michigan, which does not participate in the relief program. Tyler was committed in 1986 for several weeks for a depressive episode. In 2011, Tyler attempted to purchase a gun and was denied. He appealed to the FBI and was told that he had no recourse unless Michigan began participating in the relief program. In 2012, Tyler filed a lawsuit against county, state, and federal defendants, alleging that because Michigan has no relief program, federal law creates a permanent ban on his Second Amendment rights. He also alleged Equal Protection and Due Process violations. The district court dismissed his case for failure to state a claim, but the Sixth Circuit reversed and remanded to the district court, instructing it to analyze Tyler’s claims using an intermediate scrutiny standard to determine the constitutionality of the federal statute. Tyler v. Hillsdale Cty. Sheriff's Dep't, No. 13-1876, 2016 WL 4916936 (6th Cir. Sept. 15, 2016).