SEC and CFTC charge bitcoin-funded securities dealer and CEO

The Securities and Exchange Commission filed charges against an international securities dealer and its Austria-based CEO for allegedly violating the federal securities laws in connection with security-based swaps funded with bitcoins.

According to the SEC’s complaint, 1pool, a/k/a 1Broker, registered in the Republic of the Marshall Islands, and its CEO Patrick Brunner solicited investors from the US and around the world to buy and sell security-based swaps. Investors could open accounts by simply providing an email address and a user name – no additional information was required – and could only fund their account using bitcoins.

The SEC alleges that a Special Agent with the Federal Bureau of Investigation, acting in an undercover capacity, successfully purchased several security-based swaps on 1Broker’s platform from the US despite not meeting the discretionary investment thresholds required by the federal securities laws. The SEC also alleges that Brunner and 1Broker failed to transact its security-based swaps on a registered national exchange, and failed to properly register as a security-based swaps dealer.

“The SEC protects US investors across a variety of platforms, regardless of the type of currency used in their transactions,” said Shamoil Shipchandler, director of the SEC’s Fort Worth Regional Office. “International companies that transact with US investors cannot circumvent compliance with the federal securities laws by using cryptocurrency.” The SEC’s complaint seeks permanent injunctions, disgorgement plus interest, and penalties.

In a parallel action, the Commodity Futures Trading Commission (CFTC) announced charges against 1Broker arising from similar conduct. The CFTC’s Complaint charges include engaging in unlawful retail commodity transactions, failing to register as a Futures Commission Merchant (FCM), and supervisory violations for failing to implement procedures to prevent money laundering as required under federal laws and regulations.

Read the SEC and CFTC releases

Related Posts

Previous Post
Elon Musk charged with securities fraud for misleading tweets
Next Post
TD plans robo-advisory on the blockchain for direct investing clients

Related Posts

Fill out this field
Fill out this field
Please enter a valid email address.

Menu
X

Reset password

Create an account