Bitcoin Fraudster Charged $7 Million By CFTC

To start off the month of October in good ol’ bitcoin fashion, The Commodity Futures Trading Commission (CFTC) has charged a Pennsylvania-based citizen, for allegedly defrauding what would have been customers of $7 million in Bitcoin.

According to a statement from the CFTC. the complaint accuses a one Jon Barry Thompson of making “false representations to customers,” misleading investors into thinking he or the firm he was involved with, were in possession of bitcoins that were available for purchase last year.

Filed in a Southern New York District Court, Thompson has been accused of defrauding two businesses and requested them to send him an overall total of $7 million in exchange for the bitcoins, according to the CFTC. Said funds weren't under security though and were sent to third parties in quick sucession. As reported by AtoZ Markets “not only did the customers not receive their bitcoins, but Barry allegedly lied to them repeatedly about the status of the transactions and the location of the coins in question. The case was filed by the CFTC Division of Enforcement Virtual Currencies Task Force.”

The CFTC Director of Enforcement James McDonald said:

“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. Rooting out misconduct involving crypto assets is essential to furthering the responsible development of this nascent space.”

The regulator is looking for civil monetary penalties, disgorgement and restitution from Thompson. On top of this, it is also searching into banning him permanently from crypto trading and respective exchanges.

“The CFTC will continue to work to hold fraudsters accountable, and where appropriate, operate in parallel with our criminal law enforcement colleagues.”

It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!