The US Commodity Futures Trading Commission (CFTC) has charged a man in Pennsylvania accused of running a $7 million bitcoin fraud scheme.
In a complaint filed against Jon Thompson in the US District Court for the Southern District of New York, the CFTC alleges that, contrary to Thomson’s false representations, neither he nor a company with which he was affiliated had possession or control of the bitcoin that was to be delivered to the customers.
The complaint alleges that bitcoin was never delivered to the customers and customer funds were not safeguarded as promised. This case is brought in connection with the CFTC Division of Enforcement Virtual Currencies Task Force.
“Fraudulent schemes, like that alleged in this case, undermine the integrity of new and innovative markets and cheat innocent people out of their hard-earned money,” says CFTC director of enforcement, James McDonald. “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.”
The CFTC’s complaint alleges that, in or about 2018, Thompson induced two customers to send roughly $7 million to fund the purchase of bitcoin after making false representations that he or the company had the bitcoin in hand and the customers’ money would be safeguarded.
After receiving the customers’ money, the complaint alleges, Thompson sent virtually all of the money to third parties without first receiving any bitcoin in return. It is further alleged that after taking the customers’ money and failing to provide any bitcoin in return, Thompson lied to the customers about the location of the bitcoin, the reasons the transaction was not completed, and the status of the customers’ money.