San Francisco Crypto Fund Co-Founder Convicted of Wire Fraud and Conspiracy

A San Francisco-based cryptocurrency fund co-founder has been convicted of wire fraud and conspiracy by a federal jury. Japheth Dillman, who co-founded Block Bits Capital with David Mata in 2017, was accused of deceiving investors out of nearly $1 million.

The trial focused on an automated trading bot that promised to generate profits for investors but never actually worked. Prosecutors said Dillman knew the autotrader software was not functioning as claimed even as he made promises to investors.

David Mata, Dillman's former business partner and co-founder of Block Bits, testified against him in court under a cooperation agreement with prosecutors. The SEC has also filed civil charges against Dillman and Block Bits entities, seeking permanent injunctions, disgorgement, and civil penalties.