The United States Justice Department released a statement Thursday that following an investigation by a joint task force comprised of the Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI), the founder of the Bitcoin-denominated stock exchange BitFunder, has been arrested.
Jon Montroll, the owner of the former exchange, is officially charged with perjury and obstruction of justice, as a result of Montroll repeatedly lying to the SEC during testimony, to “conceal substantial customer losses due to a software exploit.”
In the Justice Department’s complaint, BitFunder suffered a hack that enabled the hackers to credit funds to buy Bitcoin, which were later withdrawn to the tune of 6,000 BTC. It is alleged that Montroll "provided sworn testimony to the SEC's New York Regional Office in connection with their investigation into the Exploit and BitFunder's activities.” In his testimony, Montroll submitted “false documentation” in regards to a balance ledger that showed an incorrect number of Bitcoin.
Evidence shows that Montroll had participated in an internet chat with another party, where they discussed tracking down “stolen coins.” The statement released by the Department of Justice reads:
"Contemporaneous digital evidence, including chat logs and transaction data, revealed that the Balance Statement was a misleading fabrication. Three days into the Exploit, [Montroll] had participated in an internet relay chat with another person ("Person-1") in which he sought help in tracking down "Stolen coins." When that did not work, [Montroll] transferred some of his own bitcoin holdings into WeExchange to conceal the losses. The Exploit, however, continued. By the time of the Balance Statement, WeExchange actually held thousands of bitcoins less than [Montroll] had asserted through the false Balance Statement.”
When confronted with the evidence, the statement further alleges that Montroll repeatedly lied to the SEC.
Montroll has been charged with two counts of perjury and one count of obstructions, together carrying a potential maximum combined sentence of 30 years in prison. The Department of Justice closed their “complaint” clarifying that the charges are “merely accusations” and the dependance is presumed innocent until proven guilty.