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.

AccessTimeIconJul 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

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