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Bitcoin Escrow Chief Pleads Guilty to Crypto Fraud, Also Ordered to Repay $7.4M
The head of the Volantis escrow company faces up to 10 years in prison for defrauding customers.
By Danny Nelson
Updated Sep 14, 2021, 10:03 a.m. Published Oct 2, 2020, 3:38 p.m.
The head of bitcoin escrow company Volantis pleaded guilty in New York on Thursday to bilking an investor of over $3 million. He also settled parallel commodities fraud charges.
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Jon Barry Thompson, 49, admitted in Manhattan federal district court that his crypto companies – Volantis Market Making LCC and Volantis Escrow Platform LLC – never followed through with a promised $3.25 million bitcoin buy for one unnamed customer in the summer of 2018.
- Thompson admitted to misrepresenting his companies' bitcoin custody, control, purchasing practices and risk exposure in order to secure the customer's funds.
- He then wired the cash to a third party without first receiving the bitcoin, as he had promised the customer he would.
- But the bitcoin never materialized and the customer's funds were never returned.
- Thompson could face a maximum 10-year prison term. His sentencing is scheduled for Jan. 7, 2021.
Thompson also settled charges brought by the Commodity Futures Trading Commission (CFTC) on Thursday. A newly filed consent order requires him to pay $7.4 million in restitution to two victims, permanently bars him from bitcoin trading, and compels him to cooperate with the CFTC in any future investigations.
- Thompson's pledge to cooperate may pay immediate dividends.
- In mid-September, SDNY prosecutors filed charges against two individuals who allegedly defrauded $3 million from the "principal" of Volantis bitcoin escrow in June 2018.
Read more: Two Charged With Duping Investors Out of $5M With Bogus Bitcoin-Buying Brokerage
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