Jon Montroll, BitFunder Exchange Founder Charged With Fraud, Perjury

BitFunder Founder Charged With Covering Up Hack

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Texas: Jon Montroll, 37, founder of the defunct cryptocurrency exchange, BitFunder, has been charged by the US securities regulator attempting to conceal information about a major hack which was carried out on his platform in July 2013. More so, the Office of the US Attorney for the Southern District of New York concurrently charged Jon Montroll of Saginaw, Texas who also ran a digital wallet service “WeExchange Australia”, with two counts of perjury and obstruction of justice. Jon is faced with a 10-year imprisonment for the combined charges.

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The Main charge levied by the US SEC is that the now-defunct bitcoin exchange, BitFunder, failed to reveal that hackers stole 6,000 bitcoins from customers account on its platform – this worth about $70 million in current rate. The hacking was carried out by exploiting a weakness in BitFunder’s code.

The hack was carried out in July 2013, and Jon Montroll allegedly lied to regulators by proving to them then that BitFunder was successful at blocking it. He went as far as transferring some of his personal bitcoin to conceal the losses and breach. More so, after misrepresenting the health of the exchange in the balance sheet, he allegedly lied to regulators again, claiming he got to know about the hack only after regulators contacted him.

The combined charges put against BitFunder and Jon Montroll include operating an unregistered securities exchange, defrauding investors and “making false and misleading statements” about the “unregistered offering of securities.”

Marc Berger, the US SEC’s New York regional office director said:

“We allege that BitFunder operated unlawfully as an unregistered securities exchange.  Platforms that engage in the activity of a national securities exchange, regardless of whether that activity involves digital assets, tokens, or coins, must register with the SEC or operate pursuant to an exemption.”

Geoffrey Berman, the Manhattan Federal Prosecutor together with William Sweeney, a director in the New York field office of the Federal Bureau of Investigation (FBI), declared that Jon Montroll was taken into custody. He was charged with perjury and obstruction of justice. The FBI official referred to Montroll’s actions as a “serious crime.”

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Jon Montroll was arrested for allegedly handling false testimony to the SEC and was slated to appear in court on February 21. The attorney’s office said:

“[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.  These charges signify that we will use the full force of the federal criminal law to protect the integrity of the SEC’s investigative process.”

BitFunder shut down in 2013, the same year the hacks were carried out, according to social posts. At the time, a Reddit user Ukyo (who was traced to be Montroll) asked users to “hold off on conspiracy theories.”


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