Japheth Dillman convicted of wire fraud in crypto fund scheme that stole nearly $1 million

A federal jury in California has convicted Japheth Dillman of wire fraud and conspiracy to commit wire fraud for his role in operating Block Bits Fund I, LP, a crypto trading fund that raised roughly $960,000 from over 20 investors using a pitch built on lies. The central lie: a proprietary autotrading bot that could exploit price differences across digital asset exchanges. The bot never actually worked. Dillman faces a maximum penalty of 20 years in prison for each count of conviction. Sentencing has yet to be scheduled. The bot that never was Block Bits Fund I operated between mid-2017 and mid-2018. The fund marketed itself to investors by claiming it had built a proprietary autotrading bot capable of digital asset arbitrage, essentially buying crypto cheaper on one exchange and selling it for more on another, pocketing the spread automatically. According to trial evidence, the bot was never operational. Instead of deploying investor capital into the promised algorithmic strategy, Dillman and his co-founder David Mata funneled the money into high-risk ventures that investors never signed up for. That included making loans and pouring funds into the AML Bitcoin initial coin offeri...