Block Bits Capital Co-Founder Convicted in $1 Million Crypto Trading Fund Scam

A federal jury has convicted Japheth Dillman, co-founder of Block Bits Capital, of wire fraud and conspiracy charges. The verdict follows a 10-day trial in the Northern District of California.

Evidence presented during the trial showed that between June 2017 and August 2018, Dillman helped raise nearly $1 million from over 20 investors for a cryptocurrency trading fund called Block Bits Capital.

Prosecutors alleged that Dillman misled investors by promoting an automated trading program called 'Autotrader' as a functioning product. However, the algorithm did not work as represented, and investor funds were diverted to personal payments and speculative cryptocurrency investments, resulting in substantial losses.

Dillman faces up to 20 years in prison and fines of up to $250,000 for each count of conviction under the wire fraud and conspiracy statutes. He is scheduled to be sentenced on December 8th.