Crypto Stock Exchange Operator Pleads Guilty to Fraud

Jon Montroll, who ran the now-defunct bitcoin investment platform BitFunder, has pled guilty to securities fraud and obstruction of justice charges.

Jul 23, 2018 at 8:54 p.m. UTC
Updated Sep 13, 2021 at 8:12 a.m. UTC

The man behind two now-defunct cryptocurrency investment sites has pled guilty to securities fraud and obstruction of justice charges.

The U.S. Attorney for the Southern District of New York announced the guilty plea on Monday, coming days after it was reported that Montroll was close to a deal with prosecutors. Jon Montroll was arrested back in February by U.S. authorities, as CoinDesk reported at the time, in connection with securities investment platform BitFunder and crypto exchange site WeExchange.

Montroll was accused of running an unregistered securities exchange, as well as providing info to investigators that was described as "misleading." Montroll also allegedly "converted a portion of WeExchange users' bitcoins to his personal use without the users' knowledge or consent," according to a statement published Monday.

He notably was accused of lying about the number of bitcoins available to BitFunder and WeExchange users after the latter was hacked, as well as committing perjury while testifying to the U.S. Securities and Exchange Commission (SEC).

WeExchange lost around 6,000 bitcoins at the time of the hack, which left the platform insolvent, as previously reported.

Manhattan U.S. Attorney Geoffrey Berman said in a statement Monday:

"As he admitted today, Jon Montroll deceived his investors and then attempted to deceive the SEC. He repeatedly lied during sworn testimony and misled SEC staff to avoid taking responsibility for the loss of thousands of his customers' bitcoins."

Though the case was originally brought by the SEC, the FBI and Southern District of New York Attorney's office prosecuted Montroll under criminal charges. U.S. District Judge Richard Berman will sentence Montroll at an undetermined future date.

Image via Shutterstock

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
Musk Sets New Condition for Twitter, Citi Says Terra’s Fallout Unlikely to Hit Wider Financial System

The most valuable crypto stories for Tuesday, May 17, 2022.

The most valuable crypto stories for Tuesday, May 17, 2022.

2
Market Wrap: Cryptos and Stocks Mixed Amid Bearish Sentiment

BTC is stabilizing around $30K while stock market volatility begins to fade.

BTC is stabilizing around $30K while stock market volatility begins to fade.

3
New Data Shows Underground Bitcoin Mining Thriving in China

The U.S. has also expanded its lead in the global hashrate competition.

The U.S. has also expanded its lead in the global hashrate competition.

4
Bitcoin sube a $30K, con una resistencia en $35K

BTC está en camino de registrar una señal de impulso positivo en el gráfico diario.

BTC está en camino de registrar una señal de impulso positivo en el gráfico diario.