A federal jury convicted Japheth Dillman, 48, of wire fraud and conspiracy over the collapse of crypto fund Block Bits Capital. Between June 2017 and August 2018, he raised close to $1 million from more than 20 investors by promising returns from an automated trading tool called the Autotrader, while knowing the algorithm did not work. Dillman and a co-conspirator used the funds to pay themselves and make speculative bets that resulted in significant losses. He will be sentenced on December 8 and faces up to 20 years in prison and a $250,000 fine per count. The investigation was conducted by the FBI and IRS Criminal Investigation, with assistance from the SEC’s San Francisco office.
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