United States government has been allowed to intervene in a fraud case by the New York Southern District Court. On 19th November, Judge Loretta A.Preska has ruled in the favor of US Government, represented by the Commodity Futures Trading Commission (CFTC), giving them the right to intervene in civil proceedings against Job Barry Thompson.
The accused Job Thompson is charged with “knowingly or recklessly making false representations to customers in connection with the purported purchase of Bitcoins worth over $7 million.” Judge Preska stated:
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.
It is claimed by the CFTC that Thompson, the head of a bitcoin escrow service, sent virtually all the money to the third parties after receiving funds from the clients. The funds were not protected by him as promised and the purported bitcoin was not delivered to the clients. The case was commenced by the CFTC in late September seeking restitution, disgorgement, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against all future infringements against Commodity Exchange Act and CFTC’s regulations.
Previously, Asa Saint Clair was charged by the Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and prosecutors for the Southern District of New York on 6th November. The offender allegedly used ill-gotten investor funds to finance his other firms as well as some of the high life in Manhattan. He was charged with one count of wire fraud. If convicted, the criminal can face a maximum of 20 years in prison.
In another fraud case, founder of massive Ponzi scheme OneCoin, which centered on a cryptocurrency that did not exist, was charged with the offense of fraud and money laundering. The currency wasn’t even backed by a proper blockchain and the price was internally controlled. Using multi-marketing schemes, they were able to make billions in revenue. In an email exchange, the founders even talked about an exit strategy, with one of them suggesting to, “Take the money and run and blame someone else for this….”. The offender, Konstantin Ignatov, faces up to 90 years behind bars.
Reggie Middleton, CEO of Delaware-registered blockchain firm Veritaseum LLC and New York-registered Veritaseum Inc., was ordered to pay $8.4 million in disgorgement in a securities fraud case previous month.
While the increased use of cryptocurrency is taking a new turn in the field of finance, it is important that crucial measures are taken by the regulatory and legal authorities to safeguard the basic rights of people. It is encouraging to see that the scammers are being charged with cruel punishments to curb the lawlessness in the business of cryptocurrency.