The prosecution claims that Dillman gave investors false information about his "trading fund," misleading them about its profitability. From June 2017 to August 2018, Block Bits Capital raised money, promising investors profits from automated cryptocurrency trading using the Autotrader software tool. In reality, the automated trading system was never launched, as per the case materials.
The raised funds went towards payments to early investors, as well as for speculative investments in other cryptocurrency projects. These investments resulted in huge losses, yet the project team continued to assure investors that trading with Block Bits would bring them significant profits, stated the prosecution.
After a ten-day trial, the court found Dillman guilty of conspiracy and fraud using electronic means of communication. The founder of Block Bits has now been released on bail. The court is scheduled to announce the sentence on December 8. Dillman faces up to 20 years in prison and a fine of $250,000 for each count of indictment.
This year, a U.S. court sentenced the 55-year-old creator of the Meta-1 Coin cryptocurrency scheme to 23 years in prison. In that scheme, over a thousand investors lost $20 million. Earlier, a Los Angeles court handed down a more lenient sentence to a Chinese citizen — for money laundering and cryptocurrency fraud amounting to $36.9 million, the man received three years and ten months in prison.
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