Securities fraud lands Bitfunder operator in prison for 14 months
Sun, 14 Jul 2019, 13:00 pm UTC
Jon Montroll, the CEO of Bitfunder pleaded guilty to charges including securities fraud and obstruction of justice. As a result, he will be spending 14 months behind bars in a recent ruling by Judge Richard M. Berman of the New York Southern District Court. Along with the imprisonment sentence, Montroll is also facing three years of probation.
As to why Montroll managed to earn the ire of the courts to such an extent, it is due to the deception that he played on consumers and officials from the government, Coindesk reports. This was with regards to the two bitcoin exchange platforms that he operated, including WeExchange and Bitfunder.com.
Hackers were basically able to penetrate the security protocols in place and as a result, 6,000 bitcoins were stolen. Instead of reporting the theft to the authorities and being transparent with investors, however, Montroll chose to keep quiet about the incident. Making matters worse is how he presented a thriving business to both the investor and even the investigators looking into his company.
Finally, in July 2018, Montroll pleaded guilty to the charges of securities fraud and for obstruction of justice by basically lying to the FBI. During that event, U.S. Attorney Geoffrey S. Berman summed up Montroll’s crimes.
“Jon Montroll lied to his investors and, after his lies caught the attention of the SEC, lied to them, too. The sentence he received serves as a reminder that this Office will not overlook those who violate their obligation to be honest with investors and the regulators working to protect them,” Berman said.
This represents only one of a number of recent convictions with regards to crimes involving cryptocurrency. Both perpetrators and operators of exchanges in a questionable manner have been sentenced to prison. With the increase in regulations and law enforcement understanding of cryptocurrency, however, such cases are expected to go down in the future.
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