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Founder of Two Closed Cryptocurrency Services Pleads Guilty to Federal Charges

The operator of two now-defunct cryptocurrency services – BitFunder and WeExchange – has pleaded guilty on charges of securities fraud and obstruction of justice.


Jon Montroll, 37, also known as Ukyo, has pleaded guilty to securities fraud and obstruction of justice in front of the U.S. Magistrate Judge James Cott in Manhattan according to Reuters.

Shadow Brokers Threaten Release of Further Hacking Tools

Sneaky Moves

According to the prosecutors, Montroll, who is from Saginaw, Texas, operated the cryptocurrency storage and exchange service WeExchange Australia PTY LTD. He also operated BitFunder.com – a platform which allowed users to sell virtual shares of businesses for bitcoins.

The prosecution stated that in the interim between 2012 and July 2013, at the least, the defendant deceived investors in WeExchange by taking their bitcoins, selling them for fiat currency and eventually spending them on personal expenses.

Going further, in July 2013, Montroll also solicited investments in a security which he conveniently called Ukyo.Loan – a derivative of his screen name, Ukyo. He promised investors that they would be able to earn daily interest and that they could redeem their respective shares at any given moment.

It All Came Crashing Down

The prosecutors stated that in 2013, hackers managed to succeed in withdrawing roughly around 6,000 bitcoins from the WeExchange platform. Needless to say, this left Montroll unable to pay what he owed to his investors in Ukyo.Loan, BitFunder, and WeExchange.

However, Montroll failed to disclose the hack and kept on soliciting investments. Moreover, he lied under oath in 2013 and in 2015 about the precise moment when he had learned about the hack and about additional matters.

Ukyo’s case is far from being the only one involving major cryptocurrency-related frauds. On July 13, a Greek court ruled to extradite Alexander Vinnik, who was accused in a $4 billion BTC money laundering scheme, to France.

What do you think of Montroll’s pleading? Let us know in the comments below!


Images courtesy of Shutterstock

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Bitfinex Hacked, Bitcoin Confirmed Stolen

Source: bitcoin

bitfinex

On August 2, 2016, it has been reported that the major cryptocurrency exchange, Bitfinex, was hacked with some customers losing Bitcoin as a result. Additionally, BitGo has commented on the event.

Also read: Indacoin: Buying Bitcoin, Litecoin with a Credit Card

The Breach of Bitfinex

Bitfinex itself confirmed the hack in a press release earlier today, saying they have halted all trading on the platform. Additionally, all deposits to and withdrawals from Bitfinex have been temporarily stopped.

The exchange does not have much information about the hack, but the press release confirmed that customers of the exchange have lost Bitcoin following the breach.

Now, Bitfinex has launched an investigation into the matter and will “secure the environment,” as the bitfinex.com domain will be taken down with the maintenance page left up. They will also be conducting a review to determine who has actually been affected by the hack.

Furthermore, Bitfinex has also reported the theft to law enforcement and is now working with them to presumably help with the investigation.

According to the press release, Bitfnex says they will have to settle open margin positions in the wake of the hack as they attempt to account for individualized customer losses. Also, it has also been stated that all settlements will be at market prices as of 18:00 UTC. This action has been taken with the intention of normalizing account balances and resuming operations.

The blockchain security company, BitGo, recently released a statement regarding the hack at Bitfinex, saying:

Dear BitGo customer:

You may have read that Bitfinex announced a security breach today. We are working with Bitfinex to determine what happened.
To date, our investigation has found no evidence of any compromise of BitGo servers or services.  We believe the compromise is isolated to Bitfinex.
The security of your transactions is our highest priority.  We will keep you up to date as the situation evolves.
BitGo Team
The Bitfinex team will be posting status updates on the event when appropriate at their status page, bitfinex.statuspage.io.

What do you think of Bitfinex’s confirmed hack? Let us know in the comments below!


Images courtesy of Bitfinex, BitGo

The post Bitfinex Hacked, Bitcoin Confirmed Stolen appeared first on Bitcoinist.net.

Bitfinex Hacked, Bitcoin Confirmed Stolen

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