On 24th July, Jon Montroll, the main accused in the $46 million Bitcoin fraud case, has pleaded guilty to obstruction of justice and fraudulence. Cott was responsible for establishing WeExchange Australia Pty Limited, which acted as a cryptocurrency exchange and depository. Users were scammed into depositing all their Bitcoin, which was used by Montroll for his personal gains. The hearing occurred in the presence of US Magistrate Judge James Cott at the Manhattan Court.
In 2012, he also founded a platform called Bitfunder, which technically acted as an exchange where users could trade their business digital assets for Bitcoins.
Bitfunder was released to the public in 2012 and from that point onwards, Montroll was alleged to have indulged in frauds in both Bitfunder and WeExchange that lead to his increased wealth. There were reports of him splurging the acquired money on luxuries like expensive hotel suites and private jets.
July 2013 saw Montroll investing in a security that he named ‘Ukyo.Loan’, a play of words on his own screen name, Ukyo. The main hook that ‘Ukyo.Loan’ offered investors are that they would incur a daily interest from their investments and that they would be able to get their shares back as and when they please.
The court hearing revealed that towards the end of 2013, computer hackers attacked WeExchange and made away with over 6000 Bitcoins stored in it.
The hack ruined Montroll’s plans to deceive users post which he was unable to pay a penny back to the investors in ‘Ukyo.Loan’ and the members of Bitfunder and WeExchange. Reports put forth by the prosecutors also show that even though Montroll was financially unstable after the hack, he continued to cheat the users on the platform, therefore, propagating the vicious cycle.
The hearing also bought to light how Montroll was investigated by the US Securities and Exchange Commission [SEC] and was even caught lying under oath.
Jon Montroll’s case is not the first that is related to cryptocurrency or digital assets. On 13th July, Alexander Vinnk the main accused in the $4 billion BTC e-money laundering scheme was found guilty by a Greek court. The court decided to extradite him to France with his homeland Russia, gunning for his release.