Block Bits Founder Convicted Over $960K Crypto Bot Scam
A U.S. District Court jury has convicted Block Bits founder Dillman of five counts of wire fraud, including conspiracy, related to a $960,000 crypto bot pitch that imploded in 2018.
The scheme involved promising investors a proprietary trading bot would harvest price differences between digital assets on over 30 exchanges, generating high returns. However, prosecutors said no such bot existed and the actual trades were made manually by co-founder David Mata through an exchange account.
Dillman told investors in June and July 2017 that the automated operation was already producing profits. Investors also believed they had 40% of their assets stored in low-risk 'cold storage' arrangements, which prosecutors said never existed.
By 2022, investor losses were estimated at $508,000. Mata testified against Dillman under a plea agreement and was branded by the defense as a 'stone-cold liar.'