CFTC Charges Individual with Multi-Million Dollar Bitcoin Fraud

The U.S. Commodity Futures Trading Commission today charged Jon Barry Thompson of Easton, Pennsylvania, with knowingly or recklessly making false representations to customers in connection with the purported purchase of bitcoin fraud worth over $7 million.  In a complaint filed in the United States District Court for the Southern District of New York, the CFTC alleges that contrary to Thompson’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.

James McDonald, CFTC’s Head of Enforcement
James McDonald, CFTC’s Head of Enforcement

“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,” said 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.

In its continuing litigation, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations, as charged.

Earlier today a criminal indictment against Thompson was returned in the United States District Court for the Southern District of New York.  See United States v. Jon Barry Thompson a/k/a “J. Barry Thompson”, 19 CR 698 (S.D.N.Y.).  The CFTC thanks and acknowledges the assistance of the United States Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation.

The CFTC Division of Enforcement staff members responsible for this case are Christopher Giglio, Peter Janowski, David W. Oakland, Lara Turcik, Steven I. Ringer, Lenel Hickson, Jr., and Manal M. Sultan.