BitFunder

Just days after the sly founder of the now-defunct Bitcoin-dominated exchange, BitFunder, Jon E. Montroll was accused by the SEC and DOJ, he has been charged with covering up hack. Montroll, also known as Ukyo, operated a major unregistered securities exchange and later defrauded thousands of them. However, it a dramatic twist, the US Securities, and Exchange Commission released a press statement on Wednesday, Feb. 21, 2018, to announce that he had been charged.

In July 2013, there was a massive hack on his exchange, and it resulted in the loss of over 6,000 BTC. It’s believed that the hackers took advantage of a weakness in BitFunder’s programming code and falsely took away with the massive amount of cryptocurrencies.

However, in a bid to evade the responsibility of what was worth about $720,000 back then, Montroll disputed the hack and provided forged balance statements to the SEC. It’s alleged that he further went ahead and transferred a portion of his own bitcoin into the exchange so as to conceal the losses.

The Department of Justice (DOJ) announced on February 21st that Montroll had been nabbed by the federal government, awaiting judgment. However, the two legal bodies charged him and the defunct exchange with perjury and blocking justice.

An FBI official termed Montroll’s charges as a “serious crime.”

The combined charges leveled against Jon Montroll and BitFunder include running an unregistered securities exchange, making false statements and defrauding those who had invested in it. He’s said to have gone against the anti-fraud and registration requirements mandatory in the United States federal securities laws. Each of the three sentences carries a maximum of 5-20 years each.

According to the SEC and the DOJ, investor protection is a huge matter of concern, and the magnitude of this case says it all. And just like what the Director of SEC’s New York, Marc Berger noted, all platforms that engage in any form of national security exchange should comply with the laws and protect its investors.

BitFunder later closed shop on November 14th, 2013, even when it was crippling with accusations of delayed withdrawals by its investors emanating from the dent left by the hack.

Later, the exchange’s woes slump further when it was declared bankrupt, and the traders exited it in droves. It’s incredible how, a couple of years later, a man who had been walking scot-free is behind bars, awaiting sentencing!

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