Altcoin News: Ex-Operator of Crypto Exchanges Received 14 Months in Prison for Trying to Deceive the SEC

July 15, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

John Montroll aka “Ukyo”, founder and operator of the discontinuing two online bitcoin exchanges: WeExchange Australia, Pty. Ltd. (“WeExchange”) and BitFunder.com (“BitFunder”), was sentenced to 14 months in prison for lying to federal regulators about a hacker attack that cost his clients 6,000 BTC or about $70 million at the current rate.

According to the prosecution, Montroll misled his clients when he refused to tell them about the attack that took place on July 2013. He also tried to hide the incident and compensate for the losses due to the funds remaining on the platform.

Initially, Bitfunder’s difficulties caught the attention of the US Securities and Exchange Commission (SEC) in the fall of 2013. Montroll tried to assure the regulator that his company was operating normally, and provided fabricated financial statements in support of his words.

A few years later, Montroll was convicted of securities fraud and obstruction of justice.

This, however, does not end his problems. In February 2018, the SEC accused Montroll of “managing an unregistered securities exchange and deceiving users” by way of civil proceedings. The regulator also claims that Montroll distributed “unregistered securities”, which were “investments” in his business, and appropriated the funds raised in this way.

Author: Marko Vidrih