Jon Barry Thompson, the head of Bitcoin escrow service Volantis Market Maker, has been charged by law enforcement agencies and financial regulators for suspected Bitcoin fraud.
According to a press release published by the United States Attorney’s Office for the Southern District of New York, Thompson is being accused of committing two counts each of wire fraud and commodities fraud, after he reportedly made false claims concerning the purchase and subsequent sale of Bitcoin worth about $7 million.
Thompson was also charged by the Commodity Futures Trading Commission (CFTC) for the same crimes earlier this week. A few weeks ago, a grand jury filed a complaint against the escrow service boss, alleging that he had defrauded two companies of money, which was initially intended for making Bitcoin purchases back in 2018.
Thompson reportedly told both companies that Volantis was registered as a limited liability company in the state of Delaware, although there are currently no records of such a filing. As the complaint notes, the escrow service is registered in the state of Pennsylvania.
Company 1: an outright scam
It adds that one of the fraudulent actions occurred in June and July 2018, when “Company 1,” an unnamed over-the-counter cryptocurrency trading company, gave Thompson and Volantis about $3 million to get the purchases done.
However, Thompson reportedly sent the funds to a third-party escrow service, and the funds just disappeared. The clients never got the Bitcoins promised, and despite requests, no refund was effected.
Instead, the accused reportedly lied to the trading company, saying that the “cash is with me, coin is with me.” He allegedly also claimed that since Volantis would be controlling both sides of the transactions, there wouldn’t be any risk of default.
Symphony: more of the same
The second occurrence involved Symphony, an investment firm based out of the Republic of Ireland. Thompson entered into a contract with the company in March 2018, promising to help facilitate a $4 million Bitcoin purchase. The transaction was reportedly run through an undisclosed third party, which Thompson gave the capital without fulfilling his end of the bargain.
As with Company 1, the Irish investment company was left out in the cold as well.
A potentially long time behind bars
Now that he has been apprehended, his past crimes have now come full circle. According to the current commodities and wire fraud laws in the state of Pennsylvania, Thompson could face up to 60 years in prison if he is found guilty on all four counts.
In its statement, CFTC Enforcement Director James McDonald reiterated the agency’s commitment to bringing criminals such as this to justice.
“Rooting out misconduct involving crypto assets is essential to furthering the responsible development of this nascent space. The CFTC will continue to work to hold fraudsters accountable, and where appropriate, operate in parallel with our criminal law enforcement colleagues.”