San Francisco Crypto Fund Cofounder Convicted of $1 Million Fraud Scheme

A San Francisco-based cryptocurrency trading fund cofounder has been convicted of defrauding more than 20 investors out of nearly $1 million.

Japheth Dillman, 48, was found guilty on one count each of wire fraud and conspiracy to commit wire fraud. The verdict followed a 10-day trial.

Evidence presented at the trial showed that Dillman and his co-conspirator raised funds from investors by claiming Block Bits Capital would profit from automated cryptocurrency trading using the 'Autotrader' software tool. However, authorities said Dillman knew the tool did not work and investor funds were not used as promised.

Dillman and his coconspirator allegedly used the funds to pay themselves and make risky investments in other cryptocurrency ventures, which resulted in big losses. They falsely told investors that Block Bits had led to significant profits.