February 21, 2018 / 9:00 PM / 9 months ago

SEC accuses former bitcoin stock exchange BitFunder of cheating users

Feb 21 (Reuters) - The Securities and Exchange Commission (SEC) on Wednesday accused former bitcoin-denominated platform BitFunder and its operator of running an unregistered securities exchange and defrauding its users.

BitFunder and its founder Jon Montroll allegedly defrauded exchange 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 said. (bit.ly/2EMkCsE)

The SEC said Montroll sold unregistered securities that he claimed were investments in the exchange and embezzled funds from that investment as well.

The complaint, filed in federal district court in Manhattan, charges BitFunder and Montroll with violations of the anti-fraud and registration provisions of the federal securities laws.

In a parallel criminal case, the U.S. Attorney’s Office for the Southern District of New York also filed a complaint against Montroll on Wednesday for perjury and obstruction of justice during the SEC’s investigation.

BitFunder was an online bitcoin stock exchange that shut down in 2013. (Reporting by Nikhil Subba in Bengaluru; Editing by Arun Koyyur)

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