U.S. prosecutors in the state of New York have unlocked fraud charges against the head of supposed cryptocurrency escrow firm Volantis for over $7 million.
As per the announcement made by the Department of Justice (DOJ), the United States Attorney for the Southern District of New York and the Assistant-Director in-Charge of the New York Field Office of the Federal Bureau of Investigation unlocked a filing with the charges on July 25. The victim, head of Volantis, Jon Barry Thompson.
Thompson was responsible for making misleading statements related to investment risks and false representations. He made this about Volantis supposed Bitcoin transaction service to collect $7 million from two different firms fraudulently. In the filing, the offenders state that the Thompson provided a service for low-risk settlements by playing as a mutual custodian for the two transacting parties.
U.S. Attorney Geoffrey S. Berman ensures that the Thompson has used this service as a front to collect the "custodied" money:
“Jon Thompson induced investors to engage in cryptocurrency transactions through his company, Volantis Market Making, by touting a transaction structure that would eliminate any risk of loss during the purchase. As his clients soon realized, however, Thompson’s representations were false, and these cryptocurrency investors ultimately lost all of the money they had entrusted with him because of his lies.”
Thompson exploited on his clients' lack of information about the emerging cryptocurrency, said FBI Assistant Director-in-Charge, William F. Sweeney Jr. He said that Thompson used confusing jargon to take benefit of firms that have less knowledge about crypto space. In promotional materials and meeting with clients, he showcased himself to be the only competent investor, custodian, and financier.
The two firms Thompson reportedly defrauded sent him multi-million-dollar wires expecting to receive bitcoin in exchange. Prosecutors claimed that the Thompson said one client “cash is with me, coin is with me,” even though he has sent their $3 million to a third-party exchange, stealing thousands of the top for personal use, without first obtaining bitcoin.
The DOJ didn't find out the suspected victim. As per the Forbes article published in January, Volantis negotiated an agreement to transfer 6,600 bitcoin to Symphony, a crypto investment company, however, the transaction never occurred.