Based on an announcement from the Southern District of New York, the operator of now non-operational bitcoin-denominated trading platform BitFunder and WeExchange deposit service- Jon Montrol- has been sentenced for securities fraud and obstruction of justice. Montroll’s proceedings started back in 2018. As at July 2018, Montroll pleaded guilty to obstruction of justice, disclosing that he provided false balance statements to the United States Securities and Exchange Commission during an investigation of the fake 6,000 BTC BitFunder hack in 2013.
Transferring Funds Without Consent
The defendant who is from Saginaw, Texas, also identified as Ukyo, will be put behind bars for 14 months as a result of swindling stakeholders of his “Ukyo.Loan” arrangement, transferring funds without investor’s knowledge or consent, and lying to Federal Bureau of Investigation (FBI) and Securities Exchange Commission (SEC) agents in the course of their investigation.
According to Manhattan U.S. Attorney Geoffrey S. Berman, Jon Montroll was dishonest to his investors and, when his lies were discovered by the Securities Exchange Commission (SEC) agents, he lied to them, too. He also added that the sentence he obtained serves to remind the public that the Securities Exchange Commission will not pardon those who violate their obligation to be honest with investors and the regulators working to protect them.
In a statement by the Department of Justice, the defendant purportedly neglected to communicate the lost funds with stakeholders or appropriate regulatory bodies. At some point, he put forward the operation as thriving and buoyant as opposed to being bankrupt. Montrol also reiterated similar claims to the Federal Bureau of Investigation and presented the Securities Exchange Commission with a fabricated picture of investor’s stocks as they began to investigate the development.
Utilizing The Exchange For Personal Use
Furthermore, Montrol’s trickery lingered on the premise where he provided substantially false and deceptive answers concerning his businesses and the hack. Furthermore, in the course of the investigation, it was discovered that Montrol utilized WeExchange as his personal bank. The attorney’s office at the time of investigation revealed that Montrol exchanged several bitcoins procured from WeExchange into United States dollars, then expended those funds on personal costs, including travel and groceries.
Correspondingly, not long before BitFunder folded up, Montrol started selling a new product, Ukyo.Loan, which he described as a round-about investment. Montrol also referred to the investments as a personal loan. In spite of his businesses’ bankruptcy, Montrol continued to promote Ukyo.Loans, earning about 978 bitcoins in the process.
It can be regarded that in this season, regulatory bodies are going all out as in May, the Securities Exchange Commission began court proceedings against Daniel Pacheco for supposedly running a multimillion-dollar cryptocurrency pyramid system. The Securities Exchange Commission charged Pacheco of conducting a fake, unauthorized provision of securities through two California-based companies, IPro Solutions LLC and IPro Network LLC, from January 2017 through March 2018. Conversely, a U.S. District Judge sentenced Blake Kantor a 44-year old New Jersey resident to 86 months behind bars for running a cryptocurrency-related conspiracy. The judge also directed Kantor to pay a total reimbursement of $806,405 given out to the unsuspecting folk who invested in his scam, as well as forfeiture of $153,000 in stolen proceeds.