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Buyer Beware: US Regulators Charge Alleged Bitcoin Fraudster for Swindling Customers Out of $7 Million

October 01, 2019

The U.S. Commodity Futures Trading Commission (CFTC) filed charges on Monday against a Pennsylvania man they allege swindled two customers out of $7 million by luring them into fake Bitcoin purchases.

According to the complaint, Jon Barry Thompson of Easton, Pennsylvania never had possession of the Bitcoin he purported to sell.

After the two individuals sent millions to Thompson, the CFTC alleges that the Bitcoin was never delivered as promised. Instead, according to the complaint, the money was sent to third parties.

The case is being handled by the CFTC Division of Enforcement Virtual Currencies Task Force. As cryptocurrencies have faced intense scrutiny, including condemnation from US President Donald Trump and Treasury Secretary Steven Mnuchin, among other policymakers, CFTC Director of Enforcement James McDonald stresses the importance of tackling crypto-related crime in order to develop more public trust in the emerging space.

Says McDonald,

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

When the Bitcoin failed to materialize, Thompson allegedly lied to the customers about the location of the Bitcoin, the reasons the transaction was not completed, and the status of the customers’ money.

The CFTC is seeking several remedies, including restitution and civil monetary penalties.

You can read the full statement here.

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