New York, NY – October 2, 2020 – Jon Barry Thompson, of Easton, Pennsylvania, has been ordered to pay $7.4 million in restitution and permanently banned from commodity trading after admitting to a fraudulent scheme involving Bitcoin, the Commodity Futures Trading Commission (CFTC) announced today.
U.S. District Judge Loretta A. Preska of the Southern District of New York entered a consent order against Thompson on Friday, resolving a CFTC enforcement action alleging he knowingly made false representations to two customers regarding their purported purchase of Bitcoin in 2018. Thompson induced the customers to send over $7 million with promises of Bitcoin that he never possessed.
According to the CFTC, Thompson falsely claimed he, or his affiliated escrow company, held the Bitcoin and would safeguard the customers’ funds. Instead of securing the cryptocurrency, Thompson allegedly diverted nearly all of the received funds to third parties. When the customers did not receive their Bitcoin, Thompson further deceived them by lying about the location of the funds and the status of the transaction.
“Fraudulent schemes, such as this, harm market participants and subvert the public’s confidence in the safety of new and innovative commodity markets,” stated James McDonald, Director of the CFTC’s Division of Enforcement. “The CFTC will continue working to protect our markets…from fraudulent schemes.”
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. Sentencing is scheduled for January 7, 2021. The case is United States v. Jon Barry Thompson, 19 Cr. 698 (S.D.N.Y.).
The consent order permanently prohibits Thompson from registering with the CFTC, trading any commodity interests, and trading Bitcoin for any account in which he has a direct or indirect interest. The CFTC cautions that restitution orders do not guarantee full recovery of lost funds.
The CFTC collaborated with the United States Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation on this matter.
Source: CFTC.gov
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