US Govt requests to intervene in CFTC lawsuit targeting Bitcoin fraudster

Maria Nikolova

The Government asks the Court for an order authorizing intervention and staying civil proceedings until the conclusion of the parallel criminal case against Jon Barry Thompson.

The United States Government is seeking to intervene in the lawsuit brought by the Commodity Futures Trading Commission (CFTC) against Bitcoin fraudster Jon Barry Thompson.

On November 18, 2019, the Government filed a set of documents with the New York Southern District Court requesting an order authorizing intervention by the United States and staying civil proceedings until the conclusion of the parallel criminal case, United States v. Jon Barry Thompson, 19 Cr. 698.

The Government notes that the criminal case arises from the identical set of facts and circumstances that underlie the civil action. As a result, according to the Government, a full stay is especially appropriate because any exchange of discovery would be asymmetrical and would merely allow the defendant to circumvent the criminal discovery rules and improperly tailor his defense in the criminal case.

On July 25, 2019, a criminal complaint was unsealed, charging Thompson with two counts of commodities fraud and two counts of wire fraud. The charges related to two fraudulent schemes in which Thompson induced two victim companies to send millions of dollars to his companies, Volantis Escrow Platform LLC and Volantis Market Making LLC in connection with the sale of Bitcoin. On September 25, 2019, an indictment was returned, charging Thompson with the same counts, based on the same conduct alleged in the criminal complaint.

On September 25, 2019, the CFTC filed a complaint against Thompson alleging violations of the commodities laws related to the same schemes.

As alleged in the Criminal Complaint, the Indictment and the CFTC Complaint, Thompson claimed in promotional materials for Volantis that Volantis “minimize settlement default risk” in cryptocurrency transactions. Thompson claimed that because Volantis acted as a custodian of assets for “both sides of the transaction, there is no risk of default.”

In or about 2018, Thompson induced two customers to send roughly $7 million to fund the purchase of bitcoin after making false representations that he or the company had the bitcoin in hand and the customers’ money would be safeguarded. After receiving the customers’ money, Thompson sent virtually all of the money to third parties without first receiving any bitcoin in return. It is further alleged that after taking the customers’ money and failing to provide any bitcoin in return, Thompson 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 seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.

Read this next

Institutional FX

CME Group reports solid FX volumes, micro BTC futures average 27K contracts

CME Group (NASDAQ: CME), the holding company for CBOT, NYMEX, and COMEX exchanges, has just released its trading monthly review for November 2021, which showed a mixed performance across the group’s six product lines, according to a CME statement.

Institutional FX

PrimeXM’s volume hits new all-time high at $1.23 trillion

Average daily trading volumes across PrimeXM data center locations surged by over a third to a new record last month amid broad growth across different asset classes, the Swiss-founded technology company said today.

Institutional FX

Hedge-fund legend Steven Cohen invests in Dmitri Galinov’s 24 Exchange

24 Exchange, the OTC platform backed by Fastmatch founder Dmitri Galinov, has completed a fresh fundraising round of $14.25 million at an undisclosed valuation. The recent capital injection was led by Point72 Ventures, the venture capital firm of the hedge fund titan Steven Cohen.

Retail FX

5 Tips to Diversify Your Portfolio

Diversification is a popular investment strategy that has been used for decades by many investors of the calibre of Warren Buffet. Traders and investors take advantage of diversification because it reduces the risk of a portfolio and maximizes its returns.

Uncategorized

FX volume at Integral hits a fresh yearly high at $50.6 billion a day

Currency trading on Integral’s platforms rose in November from a year earlier as increased volatility across financial markets led to greater activity on institutional FX venues.

Industry News

Wise planning aggressive North American expansion in 2022

Wise, one of the largest payment technology companies that are looking for different and easier ways to move money around the world, has announced that it would be looking to rapidly ramp up its team and its services in the North American region in 2022.

Digital Assets

Coinbase buys Israeli firm Unbound Security

Coinbase, one of the largest crypto exchanges in the US, has announced that it has bought the company named Unbound Security, an Israel-based firm dealing with the security of crypto transactions, for an undisclosed sum.

Digital Assets

Square changes name to Block, signalling Jack’s interest in blockchain

Square, one of the largest payment companies in the world that are deep into crypto as well, has announced that it would be changing its name to Block, perhaps signaling its increasing intent to delve deeper into the blockchain.

Institutional FX

Cboe reports rebound in FX institutional volumes for November

Cboe’s institutional spot FX platform on Tuesday reported ‎its trading volumes for November 2021, which saw a ‎positive performance as a rise in volatility encouraged more buying and selling ‎of currencies relative to the month prior.‎

<