New Developments in $7 million Bitcoin Fraud Case

In the United States Vs Jon Barry Thompson case, the defendant is facing charges of either recklessly or deliberately making false representation to his customers regarding the purchase of Bitcoins worth over $7 million. The United States government had restricted the District court of New York to allow them to interfere, which was granted by Judge Loretta A. Preska on Nov. 10.

Judge Preska concluded;

Upon the consent of all relevant parties, the Government’s application to intervene in the above-entitled matter and to stay the matter in its entirety until the conclusion of the parallel criminal case, United States v. Jon Barry Thompson is granted.

CFTC acknowledged that cases like these projected a negative image of innovative markets.CFTC Director of Enforcement James McDonald stated in a press release:

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.

Thompson, a resident of Easton, Pennsylvania, was accused by two of his clients for taking their funds instead of buying bitcoins but instead sent their money to third parties and didn’t give the clients anything back.

The case fell under Commodity Futures Trading Commission (CFTC), and which seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against all further violations of the Commodity Exchange Act and CFTC’s regulations. Judge Preska’s ruling on Nov. 19, the U.S. Federal government -represented by CFTC is now authorized to intervene in civil proceedings that involve multimillion Bitcoin scams.

The case was brought before the court in connection with the CFTC’s Division of Enforcement Virtual Currencies Task Force. This is not one case, as many have surfaced along the years in the crypto-industry. Last week the United States had to extradite a Swedish national from Thailand for allegedly selling fraudulent securities to investors online, collecting over $11 million worth of Bitcoin.

Roger Nils-Jonas Karlsson was arrested on charges of alleged securities fraud, wire fraud, and money laundering. Karlsson is known to have tricked 3,575 people with fake IDs in the promise of better return in Bitcoin as well as Gold but later invested that money into Thailand’s real estate sector.  Similarly, another massive Ponzi scheme OneCoin was unveiled. The company gathered investment from investors without actually making any cryptocurrencies of its own. The owner was found guilty and sentenced to 90 years of prison. On Nov. 6th, another man name Asa Saint was facing charged for his alleged involvement in fraudulent cryptocurrency scheme Igobit. The case is undertrial in the Southern District of New York and may result in a sentence of 20 years in prison if found guilty.

Another case that unfolded last month was that of the Veritaseum LLC, its CEO was penalized with $4.8 million for his role in a securities fraud case. Such cases are defaming the Crypto-industry and they are the reason why most people are reluctant to take part in the digital currencies or any of its sectors.

SEE ALSO: US Court Rules in Favor of Government Intervention in $7m Bitcoin Scam

Shehryar Hasan

Performing artist, guitarist and sub-editor at BlockPublisher. Shehryar is an electrical engineer and blockchain enthusiast. He holds investments in bitcoin, ethereum, OST, TRX and Ripple. Email: or contact the editor at

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