Bitcoin Stock Exchange Founder Pleads Guilty in US Court

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Bitcoin Stock Exchange Founder Pleads Guilty in US Court

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Founder of no longer operational Bitcoin stock exchange BitFunder pleaded guilty to federal charges before US Magistrate Judge James Cott in Manhattan on counts of obstruction of justice and securities fraud, according to prosecutors on Tuesday.

37-year-old Jon Montroll admitted in the courtroom he had given the US Securities and Exchange Commission (SEC) fallacious bank records during the 2013 investigation regarding the BTC 6,000 hack on BitFunder, worth then around USD 720,000 and now over USD 45 million. Montroll attempted to conceal this hack that had exploited a weakness in the platform’s code, even continuing to solicit investments on BitFunder following the attack.

Official charges were filed against Montroll in February this year by the SEC and Department of Justice (DoJ), pinning him to the operation of an unregistered securities exchange, defrauding users on the exchange, and making inaccurate and deceptive statements about unregistered security offerings. They also accused him of two counts of perjury and one count of obstruction of justice, which can respectively carry maximum sentences of 5 and 20 years.

Prosecutors reported that as well as BitFunder, US citizen Montroll operated WeExchange Australia Pty Ltd, a Bitcoin exchange and wallet platform. They accused Montroll of defrauding investors by appropriating Bitcoin funds on WeExchange, before selling them for fiat currency and spending the money on his personal expenditure.

In July 2013, prosecutors claim Montroll began facilitating investments in a security he named Ukyo.Loan, after his online pseudonym, Ukyo. While he promised investors daily interest and the freedom to sell at any time, when BitFunder was hacked later that year, he was unable to pay what he owed to Ukyo.Loan investors.

Montroll became subject to SEC investigations following his malpractice, continuing to lie during sworn interviews in both 2013 and 2015 when questioned on the information he knew about the hack, among other matters.

Daniel Levy, a lawyer for Montroll, declined to comment on the case at Reuter’s request.

 

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