According to a press release from the CFTC today, Thompson who hails from Easton, a city in and the county seat of Northampton County, Pennsylvania, United States, has been accused of “knowingly or recklessly making false representations to customers in connection with the purported purchase of bitcoin worth over $7 million.”
The complaint officially filed a lawsuit in the US court of the Southern District of New York, alleging that the accused failed to deliver purchased bitcoin to customers neither were customers’ funds “safeguarded as promised.”
The indictment notes that “contrary to Thompson’s false representations, neither he nor a company with which he was affiliated had possession or control of the bitcoin that was to be delivered to the customers.”
The case was first filed in July 2018, after Thompson lured two customers into sending about $7 million for the purchase of bitcoin by “making false representations that he or the company” had the cryptocurrency in hand while guaranteeing the safety of customer’s funds.
Per the release, after receiving money from the customers, Thompsons transferred all the funds to “third parties” as payment for bitcoins without first receiving the coins. As the business deal went south, Thompsons then lied to the victims about the “locations of the bitcoins, the reasons the transaction was not completed, and the status” of the money.
The CFTC is now seeking “restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.”
James McDonald, the Director of CFTC Division of Enforcement Virtual Currencies Task Force, notes that “fraudulent schemes” like the one of Thompson’s case not only make people lose their “hard earned money” but also affects the “integrity of new and innovative markets.”