- Ethereum Price Technical Analysis (Oct. 17): Still in the Panic Phase
- Tokens Pegged to Nike's Sneakers Fall Sharply after Daryl Morey’s Hong Kong Tweet
- Ford Explores New Blockchain and Geofencing Tech to Lower Emissions
- Taking Cover from Brexit? Wales Set to Launch a Native Virtual Currency
- Bitcoin Price Technical Analysis (Oct. 16): Trending Sideways with Negative Sentiment
Recently, one cryptocurerncy scammer was sentenced to 14 months in prison and 3 years of supervised release. Jon Montroll who had been operating cryptocurrency related services is about to face 14 months in prison after having pleaded guilty to securities fraud and obstruction of justice, as reported by the US Justice Department.
Montroll was operating two inter-linked crypto businesses since 2012 and lost his investors’ money due to major computer hack in his system which he tried but couldn’t hide. Let’s dig deeper into the story.
Jon Montroll who had reportedly operated the Bitcoin-related services WeExchange and Bitfunder, has presented in front of Judge Richard M. Berman of the New York Southern District Court to process his criminal case where he was sentenced to prison.
The court ordered the Federal Bureau of Prisons to place Jon Montroll in the FCI Camp facility Bastrop in Texas or the FCI Camp facility Texarkana in Texas. Earlier, Montroll has tried to push for for a probationary sentence but it didn’t work out well and the prosecution ultimately tried to put him in prison for an even longer period, in the vicinity 30 months.
He has pleaded guilty to securities fraud and obstruction of justice for luring unsuspecting investors and the ones who were holding the cryptocurrency known as Ukyo. According to the report, Montroll’s system was hacked and, in a desperate attempt to cover it up, he had to lie in the investigation of the US SEC. However, the SEC investigators uncovered the truth and discovered that the attack has left Bitfunder with a serious financial damage.
Montroll Covered Up the Hack and the Cryptocurrency Theft
According to the investigation of the SEC, illicit activities had been reported throughout about a month, beginning from late July 2013 to the 27th of August. Hackers infected BitFunder’s programming code so that they could illegally transfer Bitcoin directly to their own wallets. When Montroll discovered the breach, he tried to cover it up and transferred a large amount of Bitcoin he had stored elsewhere into the WeExchange system to balance the losses.
However, he couldn’t hide the fact that Bitfunder was already exploited. During the interrogation conducted by SEC, he denied the fact that the attacks and the ensuing losses ever happened, and claimed that he had successfully managed to detect and stop these attacks. A few weeks after that, he finally admitted that these hacking attacks have caused significant financial losses and that the users’ crypto funds were stolen.
Cryptocurrency scams are becoming quite prevalent, especially the ones where innocent investors are promised to earn multi-figure returns on their initial investments but receive nothing after the company or the one who promise the scheme often disappears wiping out investors’ money. This case is, unfortunately, just another one in a long series.