Jon Barry Thompson, of Easton, Pennsylvania, has been ordered to pay over $7.4 million in restitution and permanently banned from commodity trading after admitting to a fraudulent scheme involving Bitcoin purchases, the Commodity Futures Trading Commission (CFTC) announced this week.
U.S. District Judge Loretta A. Preska of the Southern District of New York entered a consent order on October 2, 2020, resolving a CFTC enforcement action against Thompson. The CFTC charged Thompson with knowingly and recklessly making false representations to two customers regarding their intended purchase of Bitcoin in 2018.
According to the order, Thompson induced the customers to send a combined total exceeding $7 million, falsely claiming he, or an affiliated escrow company, already possessed the Bitcoin and would safeguard their funds. However, the CFTC found Thompson immediately transferred nearly all of the received funds to third parties *without* securing any Bitcoin for the customers.
Following the transfer of funds and failure to deliver the Bitcoin, Thompson allegedly continued to deceive the customers, providing false information about the Bitcoin’s location, the reasons for the incomplete transaction, and the status of their money.
In a parallel criminal case, Thompson pleaded guilty to one count of commodities fraud before U.S. District Judge Edgardo Ramos on October 1, 2020, and is scheduled to be sentenced on January 7, 2021. The case is United States v. Jon Barry Thompson, 19 Cr. 698 (S.D.N.Y.).
The CFTC cautioned that restitution orders do not guarantee full recovery of lost funds, as defendants may lack sufficient assets. The agency emphasized its commitment to protecting customers and holding wrongdoers accountable, particularly in the evolving digital asset markets. The investigation received assistance from the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation.
Thompson is now permanently prohibited from registering with the CFTC, trading any commodity interests, and trading Bitcoin for any account in which he has a direct or indirect interest.
Source: CFTC.gov
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