The US Commodity Futures Trading Commission has charged Jon Barry Thompson of Easton in Pennsylvania with making false representations to customers in connection with the purported purchase of bitcoin worth more than US$7 million.

In a complaint lodged in the United States District Court for the Southern District of New York, the CFTC alleges that between June and August last year, Jon Barry Thompson employed a deceptive and fraudulent scheme by knowingly or recklessly making false representations to customers in connection with the purported purchase of virtual currency, specifically Bitcoin, worth millions of dollars.

Despite his blandishments, according to the complaint, neither he nor a company with which he was affiliated (an 'escrow company') had possession or control of the Bitcoin that was to be delivered to the customers. Bitcoin was never delivered to the customers and customers' funds were not safeguarded as promised. Instead, Thompson transferred customers' funds to accounts for the benefit of others, with some going to a company affiliated with Thompson. In an effort to conceal from the customers the fact that they had been defrauded, Thompson made additional false representations as to why he was unable to deliver the Bitcoin to them as promised.   

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 s6(c)(1) Commodity Exchange Act and CFTC regulation 180.1(a), 17 C.F.R. § 180.1(a) (2019), as charged.