Shuttered Exchange BitFunder Founder Charged With Fraud

The US securities regulator has charged the now-shuttered BitFunder with attempting to hide information about a major hack.
Meanwhile, the US Attorney’s Office for the Southern District of New York simultaneously charged BitFunder founder, 37-year
old Jon E. Montroll of Texas who also ran digital wallet service WeExchange Australia, with two counts of perjury and
obstruction of justice. He faces decades in prison for the combined charges. Chief among the charges by the SEC is that
former bitcoin exchange BitFunder failed to disclose that hackers stole 6,000 bitcoins from customers on the BitFunder
platform, worth an estimated USD 70 million in today’s terms, that BitFunder was unable to cover. The hackers did so by
exploiting a weakness in the exchange’s code. The hack occurred in July 2013, and Montroll allegedly misled regulators by
testifying then that the exchange’s systems were successful at blocking it. He went to great lengths to conceal the breach,
even transferring some of his personal bitcoin to disguise the losses. Meanwhile, after misrepresenting the health of the
exchange’s balance sheet, he allegedly lied to regulators yet again, saying he learned of the hack only after regulators
contacted him.


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