{"id":241348,"date":"2019-10-23T18:31:31","date_gmt":"2019-10-23T22:31:31","guid":{"rendered":"http:\/\/insidebitcoins.com\/?p=241348"},"modified":"2019-10-23T18:31:31","modified_gmt":"2019-10-23T22:31:31","slug":"convicted-bitcoin-exchange-operator-will-pay-over-150k-in-restitution","status":"publish","type":"post","link":"https:\/\/insidebitcoins.com\/news\/convicted-bitcoin-exchange-operator-will-pay-over-150k-in-restitution","title":{"rendered":"Convicted Bitcoin Exchange Operator Will Pay Over $150k In Restitution"},"content":{"rendered":"<p><span data-preserver-spaces=\"true\">Jon E. Montrol, the operator of Bitcoin-based exchange platform BitFunder, has been ordered by a court to make $155,570 in restitution for allegedly running an illegal investment scheme and obstructing justice.\u00a0<\/span><span data-preserver-spaces=\"true\">The verdict was rendered by Judge Richard M. Berman of the New York Southern District Court, and it will be added to the 14-month prison term that the accused had already bagged earlier this year.\u00a0<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Concealing a hack, defrauding investors, and lying to the feds\u00a0<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The case is the latest in Montrol&#8217;s securities fraud case, which first came to light last year. In July 2013, the underlying software for BitFunder was breached, essentially giving the hackers access to about 6,000 BTC from WeExchange, a crypto exchange service that Montrol operated at the time.\u00a0<\/span><span data-preserver-spaces=\"true\">According to a\u00a0<\/span><a class=\"_e75a791d-denali-editor-page-rtfLink\" href=\"https:\/\/www.justice.gov\/usao-sdny\/pr\/former-operator-bitcoin-investment-platform-sentenced-securities-fraud-and-obstruction\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-preserver-spaces=\"true\">statement<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0from the Department of Justice, Montrol failed to communicate the lost assets with his investors and didn\u2019t notify the appropriate authorities as well. On a separate occasion, he was accused of also promoting his failing operation as being \u201ccommercially successful,\u201d concealing the insolvent nature of the business<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The DOJ alleged that he made similar claims to both the SEC and the FBI while providing the former agency with falsified pictures of investors&#8217; holdings in an attempt to mislead investigators. When he was called to testify, the DOJ added that Montrol also provided \u201cmaterially false and misleading answers\u201d concerning his business and what had transpired as a result of the hack.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Investigators also found that he had been using WeExchange as a personal cash cow. They claimed that he had taken cryptocurrencies from the exchange on several occasions, exchanged them for Dollars, and sued them to bankroll his lifestyle.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">It was around this time that he began to promote Ukyo.Loan, a product which he allegedly described as a \u201cround-about investment.\u201d The loan product netted him about 978 BTC.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">His sentence is now complete<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">In July 2019, Montrol was sentenced to 14 months in jail for obstruction of justice and securities fraud, but the amount of his restitution was yet to be finalized.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to the statement from the court at the time, Montrol defrauded investors through his Ukyo.Loan scheme back in 2018, and transferred funds without notifying his investors. He was also accused of lying to agents from the Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC) while they investigated his illicit acts.\u00a0<\/span><span data-preserver-spaces=\"true\">Now that the restitution fee has been agreed on, the amended judgment for his case stands at 14 months in prison, three years of supervised release, and restitution mentioned above. The court recommended that he either be put in the FCI Camp Facility Bastrop in Texas or the facility in Texarkana, Texas. He is expected to surrender at the facility of choice to begin his sentence on or before November 29, 2019.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"fin-excerpt\">Jon E. Montrol, the operator of Bitcoin-based exchange platform BitFunder, has been ordered by a court to make $155,570 in restitution for allegedly running an <a class=\"read-more-link\" href=\"https:\/\/insidebitcoins.com\/news\/convicted-bitcoin-exchange-operator-will-pay-over-150k-in-restitution\" title=\"Convicted Bitcoin Exchange Operator Will Pay Over $150k In Restitution\">[&#8230;]<\/a><\/div>","protected":false},"author":1770,"featured_media":241349,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[9704,9706,5570,9707,9705],"class_list":["post-241348","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-more-crypto-news","tag-bitfunder","tag-montrol","tag-new-york","tag-ukyo-loan","tag-weexchange"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.8 (Yoast SEO v23.8) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Convicted Bitcoin Exchange Operator Will Pay Over $150k In Restitution - InsideBitcoins.com<\/title>\n<meta name=\"description\" content=\"Jon E. 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