The founder of crypto exchange BitFunder was arrested by the U.S. government. The investigation was managed by the Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC).
Jon Montroll has been found guilty for unfolding the exchange’s activities without an authorized license. He also has carried out numerous frauds on investors.
According to the press release posted by SEC, “BitFunder and its founder Jon E. Montroll operated BitFunder as an unregistered online securities exchange and defrauded exchange users by misappropriating their bitcoins and failing to disclose a cyberattack on BitFunder’s system that resulted in the theft of more than 6,000 bitcoins.”
The founder of BitFunder was arrested on 21 February 2018, related the U.S. Attorney’s Office, Department of Justice.
The founder’s case has dates back to 2013 when BitFunder was shuttered. However, Jon Montroll continued to carry out its crypto activities under the name of WeExchange. During the next months, the new exchange platform was attacked and the wallet lost about 6.000 Bitcoins. This hacking led the company in the period of insolvency.
The fact that attracted the SEC’s attention was that in November 2013, Montroll has filed a testimony on its own responsibility claiming that BitFunder’s balance is about 6,700 BTC.
The Justice Department invoked yesterday that “Contemporaneous digital evidence, including chat logs and transaction data, revealed that the Balance Statement was a misleading fabrication. Three days into the Exploit, [Montroll] had participated in an internet relay chat with another person (“Person-1”) in which he sought help in tracking down “Stolen coins.” When that did not work, [Montroll] transferred some of his own bitcoin holdings into WeExchange to conceal the losses. The Exploit, however, continued. By the time of the Balance Statement, WeExchange actually held thousands of bitcoins less than [Montroll] had asserted through the false Balance Statement.”
Besides the Montroll’s problems with SEC, he was found guilty for another criminal case. According to the U.S. Attorney’s Office, New York, “he is charged with two counts of perjury and one count of obstruction of justice”.
According to the law in force, only for one perjury- the culprit may be penalized with maximum 5 years, and for an obstruction of justice with another 20 years.