Bitcoin Exchange BitFunder And Its Founder Is Charged With Fraud

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Former cryptocurrency exchange BitFunder has been charged with operating an “unregistered securities exchange” According to the Securities and Exchange Commission, Jon E. Montroll who is also the BitFunder founder also defrauded users of that exchange. As a result, he was charged with two counts of perjury and one count of obstruction of justice. He is reported to have lied repeatedly to the SEC in an effort to cover theft of close to 6,000 bitcoins.

BitFunder was launched in 2012 before being closed one year later. Apart from the BitFunder, Montroll was also operating another service; WeExchange Australia. It was responsible for Bitcoin depository and currency exchange. However, Montroll, alias, “Ukyo,” a resident of Saginaw, Texas is yet to respond to all these allegations and his lawyer could not be reached for comments.

Montroll sought help from a person online

SEC says that in November 2013, Montroll falsely claimed that the system had halted the cryptocurrency withdrawals. He further stated that hackers’ attempts to rectify were futile. However, chat logs and transaction data, which he provided to the SEO later on revealed the involvement of an online person to help in tracking down the stolen coins.

Nonetheless, Associate Regional Director of the SEC’s New York Regional Office has confirmed that they have stepped up their crackdown on cryptocurrency-related fraud. They will be targeting the bad actors who are committing fraud in this ledger technology. If proven guilty, Montroll in prison for a maximum of 30 years.

The SEC has also announced a series of stock trading suspensions

This is not the first case regarding trade and exchanges of virtual currencies. A month ago, My Big Coin was slapped with My Big Coin by the Commodity Futures Trading Commission over a $6m cryptocurrency Ponzi scheme.

Nonetheless, the director of the SEC’s New York regional office Marc Berger says that they will be seeking the protection of investors by ensuring compliance with the securities laws. They will also be throwing in stock trading suspensions to various cryptocurrency operations and exchanges.  Berger emphasizes the importance of having any platform engaging in the activities of a national securities exchange registered.