CEO Bitfunder to Plead Guilty to US Charges

US law enforcement detained the 37-year-old Jon Montroll and charged him with fraud, as well as creating an exchange without a license in February this year.
24 July 2018   1376

Jon Montroll, the founder of the "stock" bitcoin exchange BitFunder, which ceased to exist in 2013, pleaded guilty to fraud with securities and giving false evidence to the investigation. This is reported by Reuters.

US law enforcement detained the 37-year-old Jon Montroll and charged him with fraud, as well as creating an exchange without a license in February this year.

According to investigators, in July 2013 Jon Montroll, with the help of BitFunder, as well as partner's crypto exchange sites WeExchange and Australia Pty Ltd, sold shares of business companies for bitcoins, and then took all the funds received for personal use.

At the same time, he began to attract investments from platform users, offering them the security Ukyo.Loan. Montroll promised investors that they will receive daily interest and will be able to redeem their shares at any time.

However, in 2013, the WeExchange site was the victim of a hacker attack, as a result of which the attackers stole about 6,000 bitcoins. After hacking, Montroll could not continue to pay the promised funds to investors Ukyo.Loan, as well as customers of WeExchange and BitFunder. Nevertheless, he continued to attract new investors without telling them about the hacker attack.

Montroll was also accused of giving false testimonies under oath. According to representatives of the US Department of Justice, he stated about the incorrect number of bitcoins available to BitFunder and WeExchange users.

US District Judge Richard Berman postponed sentencing in the Motrol case indefinitely.

Israeli BTC Investors to Face Catch 22

They need to pay taxes from Bitcoin investing in order to avoid their property arrest, but banks don't take their money due to AML issues
06 August 2019   132

Bitcoin investors in Israel are faced with the impossibility of paying taxes, as local banks refuse to accept funds received from the sale of cryptocurrencies because of the risks of money laundering and terrorist financing. About this writes the local edition of Haaretz on August 6.

Bitcoin is not recognized as a currency in Israel, therefore, individuals must pay 25% of the income from cryptocurrency trading to the treasury, and legal entities - 47%.

Investor Ron Gross told the publication that he acquired bitcoins in 2011 and reported his income to the tax office. In 2017, the bank that served Gross began to refuse to accept funds received from the sale of bitcoins. The investor met with representatives of the bank to demonstrate to them a 70-page history of bitcoin transactions as confirmation of the origin of the funds, but failed to convince them.

The tax authority is aware of the problem, but they say the ball isn’t in their courts. I’ve tried working with almost all the banks, but the minute they hear the word ‘Bitcoin’ they freeze up.
 

Ron Gross

Bitcoin investor from Israel

 

Since Gross was unable to pay taxes on time, his bank account, home, and even scooters were arrested. According to the investor, the tax authorities know about the problem, but can do nothing.

According to Haaretz, the tax office is aware of $ 86 million in unpaid taxes on income from cryptocurrency trading. It is possible that the real amount may be significantly higher.

Roy Arav, another Bitcoin investor, kept the proceeds from trading Bitcoin in an account with Israeli bank Discount under the control of the Bit2C exchange. The bank refuses to transfer money to Arava’s personal account under the pretext that its politicians forbid it to transfer funds related to virtual assets to client accounts due to the risks of money laundering and terrorist financing.

Arav also could not pay taxes and was forced to sue the bank. According to the investor, the authorities entered his position and granted him a deferral of time for the consideration of the claim.