BitFunder Founder Pleads Guilty to Charges of Fraud and Obstruction of Justice

[Cordillerabit]

The operator of now defunct Bitcoin (BTC) stock exchange BitFunder has pleaded guilty to federal charges of obstruction of justice and securities fraud, Reuters reports July 23.

According to prosecutors, 37-year old Jon Montroll, also known as Ukyo, also pleaded guilty to obstruction of justice, admitting that he provided false balance statements to the U.S. Securities and Exchange Commission (SEC) in an investigation of the fake 6,000 BTC BitFunder hack in 2013.

Montroll, of Saginaw, Texas, operated BitFunder, where users could sell virtual shares of businesses for bitcoins, as well as Bitcoin exchange and depository WeExchange Australia Pty Ltd. Montroll took WeExchanges users’ bitcoins and sold them for fiat currency, which he subsequently spent on personal expenses.

In July 2013, Montroll also started soliciting investments in a security that he dubbed Ukyo.Loan, promising daily interest and an easy redemption process. However, after the 6,000 BTC hack, Montroll was unable to pay owed amounts to Ukyo.Loan investors or WeExchange and BitFunder clients. Montroll continued to solicit investments without disclosing hack information.

In February, the SEC and the Department of Justice (DOJ) officially filed charges against Montroll, accusing him of operating an unregistered securities exchange, defrauding users of said exchange, and making “false and misleading statements in connection with an unregistered offering of securities.” The cyberattack in question led to the loss of more than 6,000 BTC, then worth around $720,000, and today over $45 million.

Earlier this month, Cointelegraph reported that the alleged former operator of BTC-e crypto exchange, Alexander Vinnik, was ruled to be extradited to France by a Greek court. Vinnik, also known as “Mr. Bitcoin,” was indicted by U.S. authorities on fraud and money laundering charges in 2017, reportedly involving up to $4 billion in Bitcoin.

Source

[btyco]

I'm glad that there is a successful prosecution because too many criminals are getting away with it thinking that this is the wild wild west. When more are brought to justice there will be less crime in crypto