Founder of BitFunder Pleads Guilty for Securities Fraud and Deception

In a previous reporting by Bitcoin Exchange Guide, the founder of BitFunder and operator of WeExchange Australia, Jon E. Montroll, also dubbed as “Ukyo” suggested a plea agreement, which awaited the approval of U.S Securities Exchange Commission (SEC). Turns out that Montroll has officially plead guilty to the charges today, which includes falsifying information, conducting in fraud and deceiving the justice system during his statement.

The plea was supposedly taken by U.S Magistrate Judge James L. Cott and the case handed over to the U.S District Judge Richard M. Berman.

U.S. Attorney Geoffrey S. Berman has revealed the news in a statement which confirmed that 37-year-old had confessed. As per quote, “He admitted today, Jon Montroll deceived his investors and then attempted to deceive the SEC. He repeatedly lied during sworn testimony and misled SEC staff to avoid taking responsibility for the loss of thousands of his customers’ bitcoins.”

It turns out that Montroll manipulated funds from WeExchange Australia without users’ accord. As per the allegations in the Complaint, Montroll converted bitcoins into USD and spent what he could on his personal expenses, which include both his basic needs and travelling purposes.

In 2013, Montroll launched “Ukyo.Loan”, which he considered and promoted as a security. He further shared in a post that users should view Ukyo.Loan as a “round-about investment in BitFunder and WeExchange”. Instead of sticking to this definition, he also introduced the security as a “personal loan and for private investment purposes”. Furthermore, promises were made to users, whom believed that they can earn interest.

Another problem that Montroll should have mentioned is that of a hack that led to the loss of 6,000 BTC, which he hid from officials, by putting in his personal funds to cover it all up. However, he was not successful in fully covering the full loss.

According to the claims made, he neither mentioned or advised the inconvenience to his users, but rather continued to promote his Ukyo.Loan. His ongoing efforts to conceal what took place, made it seem as if both platforms had many investors, and through this, allowed him to raise “approximately 978 bitcoins”.

As per justice.gov, Montroll will be facing a maximum of 20 years in prison per count of obstruction of justice. The final verdict will be stated by Judge Berman, with the date yet to be publicized.

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