A federal jury in San Francisco found 48-year-old Jafet Dillman, founder of the cryptocurrency trading fund Block Bits Capital, guilty of wire fraud and conspiracy to commit wire fraud.
The verdict was delivered after a 10-day trial presided over by U.S. District Judge Richard Seeborg.
According to court documents, Dillman, along with an accomplice, raised nearly $1 million from more than 20 investors. Between June 2017 and August 2018, they convinced investors that the fund would profit from automated cryptocurrency trading using a tool called Autotrader, developed by Block Bits Capital.
The investigation established that Dillman knew the algorithm was non-functional. Despite this, he continued to tell investors that the software was ready and operational.
The fund's founder and his accomplice used part of the raised funds to pay themselves and for risky investments in other cryptocurrency projects. These investments resulted in significant losses, but investors were told about supposedly profitable cryptocurrency trading, the statement says.
Dillman is currently released on bail. Sentencing is scheduled for December 8, 2026.
Each charge carries a maximum penalty of up to 20 years in prison and a fine of up to $250,000. The final sentence will be determined by the court.
Recall that the U.S. previously seized $112 million in cryptocurrencies in a pig butchering fraud case.
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