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Jon Montroll, CEO of Bitfunder Jailed 14Months for Defrauding Investors2 min read

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The operator of now-defunct Bitcoin (BTC) exchange BitFunder, Jon Montroll, has received a 14 months prison sentence following federal charges of obstruction of justice and securities fraud, finance and trading industry news outlet FinanceFeeds reported on July 12.

The proceedings against Montroll began last year. In July 2018, Montroll pleaded guilty to obstruction of justice, admitting that he provided false balance statements to the United States Securities and Exchange Commission in an investigation of the fake 6,000 BTC BitFunder hack in 2013.

In July 2018, Montrol pleaded guilty as reported by Coindesk for such activities. Manhattan U.S. Attorney Geoffrey S. Berman said:

“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.”

In July 2013, BitFunder’s software was said to be hacked, enabling the theft of 6,000 bitcoin from Montrol’s companion fiat-to-crypto platform, WeExchange.

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Per the DOJ’s statement, Montrol allegedly failed to communicate the lost monies with investors or regulatory authorities. On one occasion, he promoted the operation as “commercially successful” instead of insolvent. Montrol repeated similar claims to the FBI and “provided the SEC with a falsified screenshot” of investor’s holdings as they began to investigate the exploit.

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Montrol’s deception continued on the stand where he provided “materially false and misleading answers” regarding his businesses and the hack.

Additionally, during the investigation it was found Montrol used WeExchange as a personal bank. The attorney’s office wrote at the time:

“Montrol exchanged numerous bitcoins taken from WeExchange into United States dollars, then spent those funds on personal expenses, such as travel and groceries.”

Recently, U.S. District Judge Sandra J. Feuerstein sentenced 44-year old New Jersey resident Blake Kantor to 86 months in prison for running a cryptocurrency-related scheme. Feuerstein also ordered Kantor to pay a total restitution of $806,405 distributed to the victims who invested in his scam, as well as forfeiture of $153,000 in stolen proceeds.

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Despite his businesses’ insolvency, Montrol continued to advertise Ukyo.Loans netting him 978 bitcoin.

 

 

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