Authorities went after the owner/operator of long-shuttered cryptocurrency exchange, BitFunder, for allegedly lying to U.S. securities regulators. Several years back, hackers siphoned the equivalent of US $70 million from the platform. And now it appears its owner may have committed a crime by not coming clean with authorities.
SEC Charges Founder of Hacked Exchange
Recently, New York federal prosecutors announced charges against BitFunder’s founder Jon Montroll. On the same day, the Securities and Exchange Commission filed a lawsuit alleging fraud and licensing violations.
The cases date back to cryptocurrencies’ Wild West days when sites like BitFunder operated more like stock exchanges. Perhaps because of its popularity, hackers targeted Bitfunder and stole away with 6,000 bitcoins. Because of the attack, the exchange was rendered insolvent and ceased operations in 2013.
Alleged Mendaciousness Led To Criminal Charges In Bitcoin Lawsuit
Manhattan U.S. Attorney Geoffrey Berman explained:
“As alleged, the defendant repeatedly lied during sworn testimony and misled SEC staff to avoid taking personal responsibility for the loss of thousands of his customers’ bitcoins.”
Prosecutors claim Montroll ran WeExchange Australia Pty Ltd, which operated as a Bitcoin depository and exchange service, while also operating BitFunder — a service selling virtual business shares for bitcoins.
According to prosecutors, just days after the hacking, Montroll hopped online seeking help to track down some ‘stolen Bitcoins’ from the principal of another online exchange. Apparently, he also submitted a screenshot to the SEC that unfaithfully represented BitFunder’s holdings. Then, according to reports, he transferred some of his private bitcoin holdings to WeExchange, to hide the hacking losses.
It will be interesting to see how this case turns out and what, if any, punishment Montroll receives.
If the case piqued your interest, follow by searching:
U.S. v. Montroll, U.S. District Court, Southern District of New York, No. 18-mj-1372
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