Bitfunder And WeExchange Operator Pleads Guilty
News

Bitfunder And WeExchange Operator Pleads Guilty

Jon Montroll, who was the previous operator of Bitfunder and WeExchange has pleaded guilty to the various securities charges he was being prosecuted for, as well as obstruction of justice.

Charges Leveled Against Jon Montroll

The announcement of the guilty plea was made by the US South District Attorney on Monday, days after it was reported that Montroll was seeking a deal from the prosecutors. He was arrested in February for his connections with both the BitFunder and WeExchange platforms.

WeExchangeThe WeExchange platform functioned as a deposit platform for the users and WeExchange provided the currency exchange service. Montroll was accused of defrauding the platforms’ users by converting the users’ Bitcoin without their knowledge or consent and channeling the funds for his own use. He was also accused of providing false data to the SEC (Securities and Exchange Commission) investigators. The securities exchange platform was also alleged to be unregistered which saw Montroll being penalized for operating the exchange without the necessary registrations.

Montroll had also allegedly lied about the Bitcoin available after a hack attack on the WeExchange platform which led to the loss of around 6,000 Bitcoin. It is reported he failed to report the hack and instead transferred some of his own personal digital coins to the platform, trying to conceal the losses. He was accused of lying to the SEC which saw perjury charges being leveled against him.

The Guilty Plea

Geoffrey Berman’s, the US Attorney, statement confirmed Montroll’s guilty plea stating that he had admitted to deceiving his investors and perjured himself during the SEC testimonies. Montroll had also admitted to lying to the SEC in a bid to avoid being held responsible for the hack which saw his customers lose thousands of Bitcoin.

Although the case was initially filed by the SEC, the FBI also joined the prosecution as well as the Southern District of New York Attorney’s office. His sentencing will be made at a later date.

Plea Bargain By The SEC

It was previously reported that Jon Montroll was seeking a plea bargain with respect to the charges leveled against him by the SEC. This was going by the legal document that was filed by Montroll’s legal counsel which stated that there was a plea bargain awaiting finalization by the 23rd of July.

In his statement about Jon Montroll, the FBI assistant director-in-charge, William F. Sweeney Jr, said that Jon Montroll committed a serious crime in lying to the SEC about the goings on at his company. He said that Montroll went to great lengths in his quest to cover the losses of 6,000 Bitcoin that WeExchange suffered upon the hack that it experienced in 2013, and which Montroll was not forthcoming about. When asked to show how much Bitcoin was available on the platforms, Montroll tried to conceal the real situation and show that what was available was enough to cover his customers’ investments.

The guilty plea by Jon Montroll already presented to the court is evidence that the plea bargain was successful and Montroll will be receiving a more lenient charge.

July 24, 2018

About Author

Samantha Mitchell


Leave a Reply

Your email address will not be published. Required fields are marked *