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Bitcoin stock Exchange Founder Arrested by US Government on Charges of Fraud

Bitcoin stock exchange BitFunder’s FounderJon E. Montroll has been arrested after the U.S. Securities and Exchange Commission filed fraud charges.

BitFunder that administrated between 2012 and 2013, is blamed to have shafted its users by misappropriating their bitcoins and failing to disclose a cyberattack on the platform that led to the theft of more than 6,000 bitcoins.
The SEC filing alleges that in addition to the fraud allegations, Montroll operated an unregistered securities exchange and made false and misleading statements in connection with an unregistered offering of securities.

SEC director Marc Berger said in a statement that -“Platforms that engage in the activity of a national securities exchange, regardless of whether that activity involves digital assets, tokens, or coins, must register with the SEC or operate pursuant to an exemption,”

BitFunder acted as a kind of associate service of WeExchange before it closed in late 2013. WeExchange is Cryptocurrency Exchange which itself was another controversial bitcoin company that was also accused of fraud by users in 2014.

Details of the alleged “cyberattack” against BitFunder are even harder to come by, with the SEC claiming that Montroll failed to disclose the hack. A post to the popular Bitcointalk forum from July 2013 detailed a number of users claiming to have had their bitcoin balances hacked. BitFunder customer service denied it had been hacked.

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