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Amalgam Capital Ventures blockchain startup founder Jeremy Jordan-Jones has been arrested and charged by a US grand jury. The alleged charges include swindling investors of over $1 million with wire fraud, securities fraud, making a false bank statement, and aggravated identity theft. The Department of Justice (DOJ) confirmed this on Tuesday.
As per Manhattan US Attorney Jay Clayton, Jordan-Jones presented Amalgam Capital Ventures as an innovative blockchain company. Prosecutors are, however, alleging that it was a nothing operation with no genuine products or alliances.
“Jordan-Jones promoted his business as a revolutionary blockchain startup,” Clayton stated, “but in reality, it was a vehicle for his enrichment.”
The FBI’s Assistant Director Christopher Raia echoed this, accusing the founder of fabricating details about Amalgam’s capabilities and partnerships. “His blatant lies funded a luxury lifestyle at the expense of investors,” Raia said.
Court documents allege that between January 2021 and November 2022, Jordan-Jones defrauded investors and financial institutions with forged documents and fictitious assertions. He allegedly fabricated partnerships, such as relationships with sporting organizations, and offered a suite of blockchain-related products such as point-of-sale solutions and payment systems.
The indictment points out the company had “no operable products, few, if any, customers, and zero legitimate business partnerships.”
Rather than constructing a tech platform, Jordan-Jones is said to have diverted investor funds into high-end automobiles, luxury vacations, designer clothes, and Miami fine dining.
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The prosecutors further accused Jordan-Jones of presenting a fabricated bank statement to indicate Amalgam had more than $18 million in its account to obtain a corporate credit card. The account had been closed with zero balance.
Jordan-Jones will also face severe legal penalties if found guilty. Wire and securities fraud each come with a possible 20 years in prison per charge. False statements to a bank may include up to 30 years. The identity theft charge requires a minimum sentence of two years.
The government is also seeking the forfeiture of any assets traceable to the fraud, such as luxury goods or substitute properties, if the initial funds are missing.
The charges follow a burst of enforcement against misleading players in the crypto industry. Last month, former leaders of another failed crypto company, Cred, entered pleas to wire fraud in a $150 million failure.
With the market for digital assets expanding, regulators are increasing their scrutiny of businesses purporting to be in the blockchain space.
