FBI, SEC, and DOJ take down startup CEO in $1M crypto meltdown

The US Attorney for the Southern District of New York (SDNY) on Wednesday charged Jeremy Jordan-Jones, a self-styled blockchain founder, accused of defrauding investors out of $1 million. He got indicted on wire fraud, securities fraud, making false statements to a bank, and identity theft.

If convicted, Jones faces a maximum of 72 years in prison, though actual sentencing will be decided by a judge. The FBI and SEC have both played key roles in the investigation. However, the commission is also filing a parallel civil action. The case is being handled by the US Attorney’s Securities and Commodities Task Force.

FBI and DOJ slam Amalgam Capital executive

Jordan-Jones ran Amalgam Capital Ventures, a startup that he claimed was building cutting-edge point-of-sale and blockchain payment tech. He went on to boast about “big league” partnerships and breakthrough blockchain products, but prosecutors say the whole thing was a sham.

He even showed off mockups of functioning software and claimed the firm was preparing to list a native token on global exchanges.

The DOJ says Amalgam had no working products, zero real partnerships, and barely any customers. Meanwhile, Jordan-Jones was faking bank statements and submitting phony financials to secure investments and loans.

The indictment alleges that Jones used investor money to bankroll his personal lifestyle, leaving backers with empty wallets and zero returns. By late 2022, Amalgam folded, and investors were left holding the bag.

He is now facing multiple federal charges, including aggravated identity theft, which is a serious count that carries a mandatory 2-year prison term on top of any other sentence.

Clayton calls out tech-driven frauds

The release stated that investors’ funds were siphoned off to bankroll Jones’s lavish lifestyle. US Attorney Jay Clayton summed it up and stated that, “This should be an example to would-be financial fraudsters that the women and men of the Southern District and the FBI are watching and to the investing public that fraudsters often use the promise of new technology to cloak their schemes.”

Clayton has served as the US SEC chairman from May 2017 to December 2020. During his time, the commission brought over 2,300 enforcement actions. This resulted in over $10 billion in fines while returning more than $3 billion to harmed investors.

Clayton led the SEC when it sued Ripple Labs in December 2020. Recently, Ripple announced that the watchdog has dropped its lawsuit against the company.

As the crypto scams make their way through the investing public, the FBI’s annual report revealed that the IC3 received more than 140k complaints referencing cryptocurrency in 2024, which has resulted in around $9.3 billion in losses.

Amid all the frauds and scams, the global digital assets market has hit the $3.5 trillion cap. The biggest crypto, Bitcoin, went on to register its new all-time high of $111,800 on Thursday. BTC is trading at an average price of $110,845 as of press time.

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