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Bitcoin Escrow Company Charged With Scamming Investors for $7 Million

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July 26, 2019 | 

Darryn Pollock |  0 Comments| 

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Volatnis Escrow Platform LLC has come under scrutiny from the US department of justice with the head of the bitcoin escrow company, Jon Barry Thompson, being charged with defrauding investors for $7 million.

Thompson is being charged with making misleading statements about investment risks and false representations of his custody and control of digital assets.

This is another case of someone in a position of power taking advantage of the misunderstandings of potential investors in a space which calls for a lot more understanding. Investors were essentially promised and preyed upon for their nativity.

Multimillion dollar accounts

Part of Thompson’s wrongdoing involves allegedly defrauded to companies which sent him multimillion dollar wires in the hopes of that money being invested as Bitcoin. The accused did send the money off to be transferred into Bitcoin, but not before skimming off thousands of dollars for his own usage. 

Thmpson presented himself as a competent and knowledgeable cryptocurrency investor, custodian, and financier, however, he now faced a potential 40-year sentence in prison for the alleged crimes. 

Trusting in lies

Thompsons plans started to unravel when his victims suspicions were raised, however, by that time it was too late. 

U.S. Attorney Geoffrey S. Berman said in a statement:

“As his clients soon realized, however, Thompson’s representations were false, and these cryptocurrency investors ultimately lost all of the money they had entrusted with him because of his lies.”

Thompson’s ways of dealing with these clients were also fairly ambiguous, and ultimately concerning given the sums of money involved. 

Prosecutors alleged that Thompson told one client, “cash is with me, coin is with me,”

Cracking down

There has been a spate of similar crimes that have been investigated by the US prosecutors recently. It is a good thing to see, as the law enforcement is taking seriously the illegal usage and representation of cryptocurrencies, making the industry a lot less susceptible to fraud and crimes. 

In New York, this week, a man was arrested for running an unlicensed Bitcoin exchange, and in the same month, there was  another arrest of a former Silk Road drug trafficker who was attempting to wash his millions of ill-gotten Bitcoins through an exchange
 

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