Block Bits founder was accused of $1 million cryptocurrencies fraud in the US
Japheth Dillman faces a maximum sentence of 20 years in prison, a $250 000 fine, and three years of supervision after release
01.05.2022 - 07:30
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2 min
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What’s new? The US Department of Justice has charged Block Bits Fund founder Japheth Dillman with cryptocurrency fraud. According to the department, he misled investors and induced them to invest around $960 000 in a false autotrader, a bot that makes arbitrage transactions with cryptocurrencies on exchanges. Dillman told investors that the fund would profit by exploiting differences in the rates of cryptocurrencies on various platforms. According to the indictment, Dillman and his accomplice, David Mata, allegedly misrepresented the use of funds raised and the capabilities of Block Bits by forging company documents.
Information on the website of the Department of Justice
How did events develop? Prosecutors allege that in June 2017, Dillman lied to investors that the autotrader was already operating and generating significant profits for Block Bits. However, the project was not up and running at the time and the profit claims were false. The scammers also reported that investor funds had been put in cold storage to generate higher returns. In fact, the funds were invested and lost in risky cryptocurrency projects that had nothing to do with cold storage.
What awaits the accused? Dillman and Mata are charged with wire fraud. If found guilty, they face a maximum sentence of 20 years in prison, a $250 000 fine, and three years of supervision after release.
What is known about Block Bits Fund? The company was founded in 2017 and presented itself as a fund specializing in cryptocurrencies, blockchain, and initial coin offerings (ICOs). It promised investors high returns from the profits it allegedly earned by exploiting price discrepancies between the rates of digital currencies on various crypto exchanges.
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