BitFunder.com operator receives 14-month prison sentence

Hacks • July 12, 2019, 8:59AM EDT
UPDATED: July 12, 2019, 11:01AM EDT
The Block

Bitfunder operator Jon Montroll has been sentenced to 14 months in prison and three years of supervised release, Finance Feeds writes.

In 2012, Montroll became the operator of two interconnected services; WeExchange (the bitcoin depository) and Bitfunder.com (the trading platform). Users needed accounts on both platforms.

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However, Montroll allegedly used funds stored in users WeExchange wallets for his personal expenses. From mid-July 2013, he also started offering a security that he described to investors as "sort of round-about investment” in BitFunder and WeExchange, while also claiming it was for “a personal loan." In addition, Montroll did not tell users about a hack on the exchange that same month. To try to hide the losses, he then transferred a large number of bitcoins into the WeExchange system.

Montroll pleaded guilty to securities fraud and the obstruction of justice, after originally claiming to the SEC that he had found the code-vulnerability and prevented the theft.

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Isabel is The Block's London and European reporter. She previously reported for Reuters in Madrid and London, following on from her time as a freelance journalist for the Guardian and the New York Times. She has a Bachelors in War Studies from King’s College London and a Master of Philosophy from the University of Oxford. Conflict of Interest: Edward Woodford, the CEO of SeedCX, is Isabel's brother. She does not report on any issues related to Seed or advise other authors in any regard.

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