US Government Arrests Bitcoin Stock Exchange Founder
From Coindesk
The owner of BitFunder, a long-defunct, bitcoin-denominated stock exchange, has been arrested by the U.S. government.Read more: https://www.coindesk.com/us-government-arrests-bitcoin-stock-exchange-founder/The charges against Jon Montroll, also known as "Ukyo," were unveiled today by the U.S. Justice Department following an investigation that involved the Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC). The SEC is pursuing civil charges against Montroll in a separate action, alleging that he operated an unlicensed securities exchange and defrauded investors.
Montroll was arrested Wednesday, according to the U.S. Attorney's Office Southern District of New York.
The details of the cases date back to an earlier period in bitcoin's history when websites like BitFunder - a kind of stock exchange for cryptocurrency companies - were more common. BitFunder was shuttered in late 2013, and acted as a kind of companion service to cryptocurrency exchange WeExchange.
As laid out in the Department of Justice's complaint, BitFunder was the target of a hacking effort that enabled those behind the attack to credit themselves funds. This resulted in the withdrawal of roughly 6,000 bitcoins from WeExchange, rendering the services insolvent.
Prosecutors allege that, in November 2013, Montroll "provided sworn testimony to the SEC's New York Regional Office in connection with their investigation into the Exploit and BitFunder's activities." As part of that testimony, he submitted a balance statement which reflected "the total number of bitcoins available to BitFunder users in the WeExchange Wallet as of October 13, 2013" that amounted to roughly 6,700 BTC.
Yet that balance sheet statement constituted "a misleading fabrication," the Justice Department said Wednesday, alleging:
"Contemporaneous digital evidence, including chat logs and transaction data, revealed that the Balance Statement was a misleading fabrication. Three days into the Exploit, [Montroll] had participated in an internet relay chat with another person ("Person-1") in which he sought help in tracking down "Stolen coins." When that did not work, [Montroll] transferred some of his own bitcoin holdings into WeExchange to conceal the losses. The Exploit, however, continued. By the time of the Balance Statement, WeExchange actually held thousands of bitcoins less than [Montroll] had asserted through the false Balance Statement."
The people currently involved in lawsuits over Bitconnect are probably watching this news and feeling a lot more nervous about when the axe will fall on them.
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Justice is blind. But the system targets
Thanks for this update, can this not affect us on here
I had 5 friends tell me to join bitconnect back in august, I'm so damn glad that i instead kept my money in btc and xrp, i would have lost it all basically. like its only 600$ but it's my 600$ in my hardware wallets with my private keys. no lending no 3rd party and no problems. so im gunna just wait for crypto to go global and be thankful as heck everyday i didnt connect with bitconnect.
Much appreciated info. I am a newbie here and do not understand crypto currencies at all. It really worries me when I see posts like this as I have no idea what to do with the little I have in finances even though my gut instinct is to go with crypto. Peace.
A press release from the US Securities Exchange Commission has declared that it is indicting a now-defunct exchange on charges of fraud: BitFunder Charged With Fraud By US SEC
The New York Director said: