Crypto Founder Charged With $1 Million Fraud Scheme

Prosecutors have charged Jeremy Jordan-Jones, the founder of a now-defunct crypto startup called Amalgam, with fraud. The allegations state that Jordan-Jones deceived investors in his “sham blockchain” project, amassing over $1 million. The funds were reportedly used to support a lavish lifestyle.

According to the prosecutors, Jordan-Jones portrayed Amalgam as a tech company that developed blockchain-based point-of-sale payment systems. He claimed that the company had multi-million-dollar partnerships with prominent entities, including the Golden State Warriors and a professional soccer team in England’s Premier League, as well as a large restaurant conglomerate with over 500 restaurants. However, these partnerships were non-existent, prosecutors asserted. Jordan-Jones also allegedly solicited investments by promising that the funds would facilitate the listing of Amalgam’s non-existent crypto token on a crypto exchange.

While allegedly deceiving investors, including a venture capital firm, Jordan-Jones was reportedly spending their money on a luxurious lifestyle. This included expenses such as hotels and restaurants in Miami, car payments, and designer clothing. U.S. Attorney Jay Clayton stated, “Jordan-Jones, capitalizing on the publicity around blockchain technology, perpetrated a brazen scheme to defraud investors. He touted his company as a groundbreaking blockchain startup, backed by high-profile partnerships. In reality, Jordan-Jones’s company was a sham, and investors’ funds were siphoned off to bankroll his lavish lifestyle.”

Prosecutors have also accused Jordan-Jones of providing falsified documents to a financial institution. These documents were used to fraudulently obtain a corporate credit card, which he used to run up a $350,000 balance before the bank closed his account. Jordan-Jones has been charged with one count each of wire fraud, securities fraud, making false statements to a financial institution, and aggravated identity theft. These charges carry a combined maximum sentence of 82 years in prison, with the aggravated identity theft charge carrying a mandatory minimum sentence of two years.

The case of Amalgam highlights the risks associated with investing in emerging technologies, particularly in the cryptocurrency and blockchain sectors. The lack of regulatory oversight in these areas can make it easier for fraudsters to exploit unsuspecting investors. The founder's actions underscore the importance of due diligence and the need for investors to thoroughly vet the legitimacy of blockchain projects before committing funds. This case serves as a cautionary tale for both investors and regulators, emphasizing the necessity of stringent measures to prevent such fraudulent activities in the future.