Block Bits Capital Co-Founder Convicted of Crypto Fund Fraud

Japheth Dillman, co-founder of Block Bits Capital, has been convicted of wire fraud and conspiracy for defrauding over 20 investors of nearly $1 million in a cryptocurrency trading fund.

The federal jury found Dillman guilty after a 10-day trial. The conviction follows charges that he gave false information to investors about the fund's automated trading technology and performance.

Court evidence showed that Block Bits Capital presented an automated trading program called Autotrader, which was supposed to generate returns by automatically trading digital assets. However, Dillman knew the algorithm did not work as represented.

The investor money could not be deployed through the automated strategy investors had been told the fund would use. Instead, funds were used for personal payments and speculative cryptocurrency investments that resulted in significant losses.