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The U.S. Department of Justice (DOJ) has charged Volantis managing director Jon Thompson with commodities and wire fraud offenses. The company allegedly acted as an escrow account involved in the sale of large amounts of bitcoin. Thompson has been charged with defrauding buyers of $7 million worth of crypto.
Thompson faces two counts of commodities fraud, with ten year maximum sentences each, as well as two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison.
The DOJ does not name the alleged victims, of which there are two stated. However, a Forbes article, written in January, appears to outline the backstory. In mid 2018, an Irish investment company, Symphony, gave €3.3 million ($3.7 million) to Volantis in exchange for 500 bitcoins, that never arrived. At the time, says the article, Thompson blamed a separate escrow agency for the missing bitcoins—which never turned up. Symphony filed suit against Thompson, as did two other companies that claimed to have suffered the same fate.
According to the DOJ, Thompson encouraged potential investors to buy bitcoin through his company, advertising that the transactions would somehow avoid the volatility that most cryptocurrencies face. When questioned by investors, he would resort to jargon and convoluted terminology, according to investors.
FBI Assistant Director-in-Charge Sweeney said, “Thompson allegedly thought no one would ask where their actual money went when they trusted him to invest in Bitcoin.”
Thompson faced the charges in a Manhattan Federal Court on Thursday.