BTC escrow CEO charged over alleged $7M crypto fraud

The CEO of BTC escrow service Volantis Market Maker could be facing decades in prison in the United States, amid allegations of wire and commodities fraud in connection with the acquisition and disposal of millions of dollars in cryptocurrency.

Jon Barry Thompson has been accused of two counts of wire fraud and commodities fraud, with charges filed by the U.S. Attorney’s Office of the Southern District of New York.

The charges relate to purchase and sale of $7 million of cryptocurrency, and allegedly false claims by Thompson in connection with the transactions. Thompson is also facing charges filed by the U.S. Commodity Futures Trading Commission (CFTC).

Filed this summer, the complaints alleged Thompson defrauded two companies in connection with funds earmarked for crypto transactions.

It is alleged Thompson told the companies Volantis was a limited liability company based in Delaware, despite the firm being based out of Pennsylvania. At the time of these representations, BTC was trading just shy of $8,000.

“Company-1” in the complaint reportedly handed over $3 million between June and July 2018 for the purchase of BTC. An over-the-counter trade desk, the company alleges the funds were passed to a third party escrow service, without the crypto being delivered.

Telling Company-1 “cash is with me, coin is with me,” Thompson is alleged to have repeatedly lied and misrepresented the transaction to the company, claiming there was “no risk of default” because Volantis controlled “both sides of the transaction.”

To date, neither funds nor crypto have been delivered to the company, according to the charges.

Similar events occurred in a transaction by a second company, “Company-2”, an investment company based in Ireland. In March 2018, Thompson entered into an agreement for the purchase of $4 million of BTC.

It is alleged he then passed the funds to a third party service without ever receiving the cryptocurrency in return. By July 2018 the deal came to its conclusion, with Company-2 left with no cash and none of the cryptocurrency they agreed to purchase.

Under the law of Pennsylvania, Thompson faces up to 60 years in prison if convicted of the charges.

U.S. Attorney Geoffrey S. Berman said Thompson’s lies had cost his victims millions of dollars: “As alleged, Jon Barry Thompson repeatedly lied to investors in cryptocurrencies about the safety of their investments made through his companies. As a result of Thompson’s lies, investors lost millions of dollars.” 

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