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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.
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
Danny Nelson
Danny was CoinDesk's managing editor for Data & Tokens. He formerly ran investigations for the Tufts Daily. At CoinDesk, his beats include (but are not limited to): federal policy, regulation, securities law, exchanges, the Solana ecosystem, smart money doing dumb things, dumb money doing smart things and tungsten cubes. He owns BTC, ETH and SOL tokens, as well as the LinksDAO NFT.
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