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Crypto Services Platform Founder Pleads Guilty to Fraud Charges in US


The world of cryptocurrencies has been wrought with trouble since the start including everything from the volatility in its value to ever-changing regulations. And with increasing popularity of the cryptocurrency industry, the aspect of fraud has become a constant nuisance for the community at large. Among the cryptocurrency scam was the creation of the now defunct cryptocurrency services platform called BitFunder and the cryptocurrency exchange WeExchange. In a recent turn of events, the founder of these two cryptocurrency related companies, Jon Montroll, has pleaded guilty to having committed fraud in a United States courtroom.
The investment platform and cryptocurrency exchange founder, Montroll has pleaded guilty to the federal charges he has been subjected to that he has stolen the funds entrusted to him by his customers and that he has lied to the regulatory authorities in the US about the theft of virtual currency.
The US Attorney for the Southern District of New York City stated that Montroll has pled guilty to one of the counts of security fraud and one count of obstruction of justice that he has been charged with. Montroll was arrested in February for his crimes, and each of the charges that he has pleaded guilty to carries a potential two decades of jail time.
For those who are not privy to the crimes that he has committed, BitFunder was a cryptocurrency investment platform created by Jon Montroll that allowed users to sell the virtual shares of businesses in exchange for the appropriate amount of Bitcoin units in return. This company started in 2012 and shut down only a year after it came into being. The allegation against him is that he used the platform in order to defraud the investors. He converted a portion of the cryptocurrency he was entrusted with using WeExchange for his own use without the knowledge of the users of his platform.
That and the fact that Montroll solicited investments in a security known as Ukyo.Loan where he made promises to the investors that they would be getting daily interest from him and that they could easily redeem the shares they had bought whenever they chose fit.
The same year saw hackers get away with 6,000 units of Bitcoin from WeExchange, which amount to $48 million right now. That left WeExchange unable to pay back the investors from Ukyo.Loan, the users of WeExchange itself and the BitFunder investors. He never bothered to report the breach and continued to solicit investments from customers.
Only after the investigation going on right now with the United States Securities and Exchanges Commission involved has he admitted to the theft having taken place and the funds having been stolen by hackers. He also accepted that he lied to the SEC about it previously.