Sunday, September 25, 2022

US DOJ Charged Block Bits Founder Over Crypto Investment Fraud

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The US DOJ charged Block bits founder over crypto investment fraud for misrepresenting the scheme which raised $1 million from investors so let’s read more today in our latest cryptocurrency news.

The US DOJ charged Block Bits founder Japheth Dillman for misleading investors into committing a total of $960,000 to a false arbitrage Autotrader. The Block Bits Fund has founded in 2017 during the ICO era and the company presented itself as a fund dedicated to crypto and ICO but also blockchain technology. It promised investors high returns from the profit generated by leveraging the price discrepancies between the digital currencies on other crypto exchanges.

Dillman and his partner David Mata misrepresented the level and capability of Block Bits by falsifying company records. The prosecutors alleged that Dillman lied to the investors in June 2017 that the Autotrader was in operation and generating major profits for his company. There was no working Autotrader at the time and claims about the profit were false. In 2017, Dillman emailed the investors that the Autotrader was tested and will be launched a week later but the information provided was fake.

DOJ Confiscated, dark web, darknet, hacker, funds

The complaint alleged that the partenrs forged records about the management of investors’ funds and Mata and Dillman even told investors that the funds were placed in cold storage for keeping and generating higher yields. The funds were invested and lost in crypto projects that had nothing to do with the cold storage while the indictment revealed that Block Bits lost about $508,000 to the scheme. Both partners are charged with a count of wire fraud in two separate documents and if convicted after the new court appearance and they will face a maximum sentence of 20 years in prison and a fine of $250,000 and three years of supervision after release.

Dillman is not the first to face charges from the US prosecutors for operating a fraudulent scheme and the DOJ even indicted one of BitConnect’s founders on fraud charges in connection to the Ponzi scheme which drained $2.4 billion from the investors in 2018.

As recently reported, The American law enforcement agents seized $34 million worth of crypto assets tied to the illicit dark web, and the operation marked one of the biggest confiscations of crypto that was ever executed by the US Authorities. According to the announcement by the US DOJ, the hacker is a South Florida resident that used online alias to sell up to 100,000 illegal items on the dark web. He sold online account information for services like HBO, Uber, and Netflix while accessing the TOR network. The latter is a tool used by many hackers via which they bypass censorship and visit websites that cannot be found on the web.

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