The exact restitution that Jon Montroll, the operator of the shuttered Bitcoin securities exchange BitFunder and WeExchange, needs to pay has been determined on Tuesday by Judge Richard M. Berman of the New York Southern District Court.
In addition to his 14 months prison sentence, the Court found by a preponderance of the evidence that the defendant’s restitution obligation is $155,572.53. This is lower than the previously agreed upon amount of restitution of $167,438.00 as set forth in the plea agreement.
Earlier this year in July, Montroll was sentenced to 14 months behind bars for securities fraud and obstruction of justice. However, as Finance Magnates reported in September, despite the sentencing, the Securities and Exchange Commission (SEC) was yet to finalize the settlement amount, which was expected to take place this month.
With yesterday’s development, the amended judgment for Montroll sentences him to 14 months of imprisonment, three years of supervised release, and the restitution obligation of $155,572.53.
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The story of BitFunder and WeExchange
Montroll operated WeExchange Australia, which operated as a bitcoin depository and exchange service, and BitFunder.com, which functioned as a security token platform that allowed users to sell virtual shares of different firms in exchange for cryptocurrencies.
In 2013, hackers were able to break into the BitFunder backend and start stealing cryptocurrency from its users. When they were done, the cyber attackers had made off with 6,000 bitcoins – a sum that was at the time worth around $775,000.
Instead of alerting the authorities to the hack, Montroll did not reveal what had happened to his clients. Instead, he tried to return client funds using his own money.
However, Montroll’s attempts did not work, and a couple of months after the cyberattack, BitFunder users began to experience difficulties withdrawing funds from the site. Not long after that, he shut the site down.