BitFunder CEO Will Go to Jail for Over 1 Year Due to Securities Fraud for WeExchange Involvement
Jon Montroll, the former CEO of WeExchange and BitFunder, is going to prison for 14 months now that he has been judged as guilty by the New York justice. He was condemned for obstruction of justice and securities fraud.
After his release, he will also be supervised by the authorities for more three years before he is finally free. On top of that, he will also have to pay a fine of $167,000 USD to the U. S. government.
His sentence is related to some problems that he had in 2012, back when Bitcoin was still only a child. At the time, he was the CEO of both WeExchange and BitFunder. WeExchange was a crypto exchange while the other company was used to buy digital shares from several companies.
Back in 2013, BitFunder was hacked and it lost 6,000 BTC, which were only worth $775,000 USD at the time. The real problem obviously started when Montroll decided that he simply did not need to warn the investors about the theft.
Instead of telling them that the money was stolen, he simply decided to cover the tracks. He returned the money to the clients using his own money. If he was able to simply spend $775,000 USD from his own money, he would have pulled it off. The amount was huge, though, so he obviously didn’t.
After some months, some of the users started to have difficulties in order to withdraw the funds and then there was simply no way to keep up with the lies anymore. The site was shut down as the CEO simply didn’t know how to proceed.
Obviously, this led investigators from the U. S. Securities and Exchange Commission (SEC) to investigate what was going on there. Montroll lied to them and affirmed that he identified the hack early on and was able to stop it.
The investigators did not believe him completely, so they pushed on and discovered what happened, which is why he is also being charged for obstruction of justice as well.
Montroll is currently free after the trial. He is to be arrested at the end of October and to get out of jail only at the end of 2020. Prosecutors pushed for a harder sentence, but he was able to get only 14 months in jail, but he pleaded guilty and this was the only time he got.