The U.S. Securities and Exchange Commission (SEC) has filed fraud charges against a former bitcoin-denominated platform and its operator.
The SEC filed its complaint in the federal district court in Manhattan. In its complaint, it alleges that BitFunder and its founder Jon E. Montroll operated an unregistered securities exchange and defrauded users of that exchange.
According to the regulator, BitFunder and Montroll defrauded exchange users by misappropriating their bitcoins and failed to disclose a cyberattack on BitFunder’s system in which over 6,000 bitcoins were stolen. In addition, the SEC has also charged Montroll with making false and misleading statements in connection with an unregistered offering of securities and misappropriating funds from that investment as well.
“We allege that BitFunder operated unlawfully as an unregistered securities exchange. Platforms that engage in the activity of a national securities exchange, regardless of whether that activity involves digital assets, tokens, or coins, must register with the SEC or operate pursuant to an exemption. We will continue to focus on these types of platforms to protect investors and ensure compliance with the securities laws,” said Marc Berger, Director of the SEC’s New York Regional Office.
The SEC has charged BitFunder and Montroll with violations of the anti-fraud and registration provisions of the federal securities laws. The complaint seeks permanent injunctions and disgorgement plus interest and penalties.
