In a "naive" attempt to create algebraic quantum field theories on the circle, we obtain a family of unitary representations of Thompson's groups T and F for any subfactor. The Thompson group elements are the "local scale transformations" of the theory. In a simple case the coefficients of the representations are polynomial invariants of links. We show that all links arise and introduce new "oriented" subgroups $\overrightarrow F <F$ and $\overrightarrow T< T$ which allow us to produce all \emph{oriented} knots and links.