BitFunder CEO Jon Montrol Sentenced to 14 Months for Fraud and Obstruction
By Tyler Smith – Crypto Investor
According to a statement from the Southern District of New York and detailed on Coindesk, BitFunder and WeExchange CEO, Jon Montrol, has been incarcerated for 14 months in prison for securities fraud as well as obstruction of justice. The exchange will continue to no longer sell or buy Bitcoin.
Montrol, also known as Ukyo is serving this sentence for scamming investors of his “Ukyo.Loan” scheme in which he transferred the funds without their knowledge or consent and also lied to the Securities Exchange Commission (SEC) and the Federal Bureau Investigation (FBI) agents during their investigation.
Montrol pleaded guilty for every one of those charges in July. Geoffrey S. Berman, Manhattan U.S. Attorney stated that Montroll had lied to his investors and the SEC whose violation would not be overlooked. The sentence has been suggested to serve as a reminder to those that violate their duties.
Back in July of 2013, BitFunder’s software was reportedly hacked in which over 6,000 Bitcoin were stolen from WeExchange, Montrol’s companion fiat-to-crypto platform for buying and selling Bitcoin.
According to a statement by the Department of Justice, Montrol supposedly failed to communicate with regulatory authorities or the investors about the lost money. He previously termed the operation as “commercially successful” rather than being insolvent. He gave the FBI the same claims and gave the SEC “a falsified screenshot” of the investor’s holdings when they started investigating the situation.
Montrol continued to provide false and misleading answers surrounding the circumstances with his business and the hack.
Furthermore, the investigation also discovered that Montrol used WeExchange as a personal bank. At that time, the attorney’s office wrote that Montrol would exchange Bitcoin acquired through WeExchange into United States Dollars to spend on personal expenses.
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