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SEC Brings Charges Against BitFunder, Jon Montroll



De Silva

On Wednesday, the SEC filed civil charges in the federal district court in Manhattan against BitFunder and its operator Jon E. Montroll. The US Attorney’s Office for the Southern District of New York also filed a complaint in a parallel criminal case against Montroll for perjury and obstruction of justice.

Today, February 21, 2018, the US Securities and Exchange Commission (SEC) brought charges against Jon E. Montroll, 37, and BitFunder, an unregistered bitcoin-denominated securities exchange.

BitFunder was operated by Montroll from December 2012 until its closure on November 14, 2013.

According to the SEC's complaint, Montroll is accused of defrauding users "by misappropriating their funds and failing to disclose a cyberattack on BitFunder's system that resulted in the theft of more than 6,000 bitcoins." At the time, the stolen cryptocurrency was valued at $775,075 but as current prices, it would be worth more than $63 million.

The SEC further charges that Montroll "sold unregistered securities that purported to be investments in the exchange, but from which Montroll also misappropriated investor funds and failed to disclose the cyberattack and bitcoin theft."

Attorney for the Southern District of New York, Geoffrey S. Berman, and the FBI's William F. Sweeney Jr. also announced on Wednesday that Montroll had been taken into custody for allegedly providing false documentation and false testimony while under oath during the SEC's investigation into the exchange. Berman told reporters:

"As alleged, the defendant repeatedly lied during sworn testimony and misled SEC staff to avoid taking personal responsibility for the loss of thousands of his customers' bitcoins. These charges signify that we will use the full force of the federal criminal law to protect the integrity of the SEC's investigative process."

Montroll could be presented in the Northern District of Texas Court as early as this afternoon to have his criminal charges read: two counts of perjury and one count of obstruction of justice.

Matthew De Silva

Matthew has a passion for law and technology. He graduated from Georgetown University, where he studied international economics and music. Matthew enjoys biking and listening to tech podcasts. He lives in Los Angeles.

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