Crypto Escrow Operator Jon Barry Thompson Expected to Plead Guilty in $7 Million Fraud Case

Jon Barry Thompson to Enter Guilty Plea in Crypto Fraud Case

Jon Barry Thompson, operator of the fraudulent crypto escrow service Volantis Market Making, is expected to plead guilty to charges related to defrauding clients of $7 million. Prosecutors and defense attorneys aim to resolve the case by September 2020, according to a court letter.

Background of the Case

Fraudulent Escrow Operations

Thompson was charged in September 2019 with four counts of fraud linked to his crypto escrow service. Prosecutors allege that:

• First Incident: In mid-2018, Thompson received $3 million from a company to purchase Bitcoin (BTC). Instead of securing the Bitcoin, he forwarded the funds to a third party, resulting in the loss of the client’s money.
• Second Incident: Thompson convinced another company to send $4 million for cryptocurrency purchases. Similarly, a significant portion of the funds was forwarded to a third party, with the client never receiving any Bitcoin.

Misrepresentation and Deception

Thompson is accused of lying to clients about the status of their transactions, misleading them about the fate of their funds.

Legal Proceedings and Expected Guilty Plea

Progress in Negotiations

• In April 2020, Thompson’s attorney, Peggy Cross-Goldenberg, indicated that both sides had made “substantial progress” toward resolving the case.
• A letter submitted to the court by prosecutors states:
  

  “The parties expect to reach a disposition of this matter and respectfully request that the court set a control date in September 2020 for the entry of that disposition.”

Civil and Additional Legal Actions

• CFTC Charges: The U.S. Commodities Futures Trading Commission (CFTC) has filed civil charges against Volantis Market Making.
• Irish Firm Lawsuit: Symphony FS, the firm that provided $4 million for escrow services, is also suing Thompson and Volantis.

Impact on the Crypto Industry

Erosion of Trust

Cases like Thompson’s highlight the risks of fraudulent activities in the crypto sector, particularly in services requiring client trust, such as escrow operations.

Need for Regulation

The incident underscores the necessity for stricter regulations and oversight in the cryptocurrency industry to protect investors and prevent misuse of funds.

Client Due Diligence

Investors are reminded of the importance of conducting thorough due diligence before entrusting funds to third-party operators.

Conclusion: A Cautionary Tale for Crypto Escrow Services

The case against Jon Barry Thompson serves as a stark warning about the potential for fraud in cryptocurrency services. As the legal proceedings near resolution, it highlights the importance of accountability and transparency in an industry built on trust and decentralization.

To stay updated on regulatory developments and crypto fraud cases, check out our article on crypto regulations and investor protections.