The United States Commodity Futures Trading Commission (CFTC) charged Jon Barry, a United States resident with a $7 million Bitcoin (BTC)-related fraud.
In a news release published on September 30th, the regulator revealed that Jon Barry Thompson of Easton, Pennsylvania, is charged with “knowingly or recklessly making false representations to customers in connection with the purported purchase of Bitcoins worth over $7 million.”
The document claims that contrary to his claims neither Thompson nor a company with which he works with had possession of the Bitcoins that he pledged to deliver to two clients.
The agency claims that after receiving the clients’ funds, Thompson sent all of the money to some third parties and the purported BTC was not delivered to the clients.
He is also being accused of having lied to the customers about the location of the Bitcoins, the reasons the transaction was not completed, and the status of their funds.
The case was brought before the court in connection with the CFTC’s Division of Enforcement Virtual Currencies Task Force and they are asking for restitution, civil monetary penalties, registration bans and a permanent injunction against all further violations of the Commodity Exchange Act and the CFTC’s regulations.
James McDonald, CFTC Director of Enforcement issued a statement with regards to the case. He said:
“Rooting out misconduct involving crypto assets is essential to furthering the responsible development of this nascent space. The CFTC will continue to work to hold fraudsters accountable, and where appropriate, operate in parallel with our criminal law enforcement colleagues.”