Crypto Executive Arrested On Allegations Of $7 Million FraudAuthor: Ali RazaLast Updated: 30 July 2019 One issue that has plagued the crypto industry has to do with fraudulent activity and scams committed using digital assets. Many people across the world have fallen victim to crypto related scams and this has affected the industry’s bid to gain trust and move towards mainstream adoption.Another matter relating to crypto fraud has come to the fore. The U.S Attorney’s Office of the Southern District of New York has indicted the head of a crypto company on charges of defrauding investors to the tune of $7 million. The announcement was made through a press release which was published by the division of the Department of Justice. The press release stated that the head of Volantis Escrow Platform LLC, Jon Barry Thompson, was charged with two counts each of commodity and wire fraud on Thursday. The accusations state that Thompson was airbrushing investment risks and falsifying representations of digital assets’ custody and control.According to Manhattan U.S Attorney, Geoffrey S. Berman, Thompson informed investors that cryptocurrency is a zero to low-risk investment in a bid to lure these investors to his platform. Two unnamed companies were duped of $3 million and $4 million in June and July of 2018. The funds were given to Thompson on the promise that he would invest them in Bitcoin. He then went on to send false profit records to the companies. The companies did not receive any Bitcoin and neither did they get the funds they invested back from Thompson.Investors were asked to engage in cryptocurrency trading through Thompson’s company named Volantis Marketing Making. This is the company which Thompson told investors would eliminate any risk of loss during the purchase of cryptocurrency. All of the claims made by Thompson turned out to be false and the investors lost all of their money.The two charges against Thompson regarding commodities each carry a maximum sentence of 10 years in prison. Each count of wire fraud carries a maximum sentence of 20 years. On all the charges being leveled against him, Thompson is looking at a maximum of 40 years behind bars if he is convicted.Growing number of crypto related scamsThe crypto industry has struggled with scams and fraudulent activity and these seem to be increasing over time. The industry is gaining attention and more people are keen to see what cryptocurrencies have to offer. People across the globe are taking an interest in online crypto trading but there is a lot of skepticism and doubt surrounding the industry.A lot of people still do not have sufficient knowledge about cryptocurrencies and this leaves them susceptible to falling victim to scams such as the one run by Thompson. Scammers and fraudsters usually use terminology and phrases that the victims are unfamiliar within a bid to take advantage of the lack of knowledge on the victims’ part.As the crypto industry fights to enter the mainstream and encourage more people to buy cryptocurrencies on be web, scams will always have an adverse effect on those efforts. Regulators will continue to view cryptocurrency as a high risk endeavor and they will pass policies that are aimed towards cracking down on the crypto industry. If cryptocurrencies are to become part of the mainstream financial sector, there needs to be found solutions to the challenges posed by scams and fraudulent activity.