The US Security Exchange Commission (SEC) and Department of Justice (DOJ) has officially opened the door to non-operational Bitcoin BitFunder, Jon E. Montroll, Wednesday Feb. 21.

The SEC released a press statement Wednesday stating that they have brought Montroll, also known as Ukyo, with operating BitFunder as an unregistered securities exchange, defrauding users of that exchange, and making "false and misleading statements in

The SEC alleges that both BitFunder and its creator Montroll defrauded exchange users by "misappropriating their bitcoins", operated as an unregistered securities exchange, and failed to disclose a cyberattack that led To the loss of over 6,000 bitcoins.

In 2013, hackers exploited a weakness in BitFunder's programming code to falsely credit themselves with over 6,000 bitcoins. In the same time, it was worth $ 720,000, today worth over $ 60 mln., Montroll denied the success of the hackers, and addedally provide false balance statements to SEC investigators.

The formal complaint filed by the SEC charges Montroll with violations of the anti-fraud and registration provisions of US federal securities laws. According to the press release, "[t] he complaint seeks permanent injunctions and disgorgement plus interest and penalties."

The DOJ also announced today Feb. 21, that Montroll has been arrested and taken into custody by the federal government. The DOJ has a presence with two counts of perjury and one count of obstruction of justice. (19459003)

Investor protection remains a priority for the federal government in these proceedings. Marc Berger, Director of the SEC New York Regional Office stated:

"… Platforms that engage in the activity of a national securities exchange, regardless of whether it involves digital assets, tokens, or corners, must register with the SEC or operate to an exemption. "

BitFunder ceased trading on Nov. 14, 2013, and the results of this study. following the August hack. Adding to BitFunder's woes of the hack, the exchange went after, following a ban on American traders, American traders left the platform in droves.

so far, every ICO-issued token the SEC has been observed under the law, regardless of how the issuer relates to the token markets. As of December, 2017, Clayton noted that ICO had registered with the SEC.