A new cryptocurrency-related fraud has emerged from the shadows, driving the Securities and Exchange Commission (SEC) to file charges against an international securities dealer that was reportedly involved in a security-based swap fraud that was funded by Bitcoins. The Austria-based CEO of the company has also been named in the complaint for violating the securities law of the nation.
New Fraud Rocks the US Crypto Market
1pool Ltd., also known as 1Broker, is an international securities dealer registered in the Republic of the Marshall Islands. The entity, along with its CEO Patrick Brunner, solicited investors to buy and sell their security-based swaps. Account opening with the dealer was simple: investors only needed a username and an email address. The platform didn’t ask for further details. And the accounts could only be funded using Bitcoin.
An FBI undercover agent was successfully able to buy some security-based swaps on the broker’s platform even though he did not meet any discretionary investment thresholds required by the federal securities laws. The company and its CEO also failed to transact these swaps on a registered national exchange, and they did not register as a security-based swaps dealer.
International Companies Need to Follow Laws
According to the director of Fort Worth Regional Office of SEC, Shamoil T. Shipchandler, international companies that are transacting with US investors must always comply with the federal securities laws. They cannot circumvent regulation by using cryptocurrencies.
Shipchandler also noted:
“The SEC protects U.S. investors across a variety of platforms, regardless of the type of currency used in their transactions.”
The complaint by the US regulator was filed in the US District Court for the District of Columbia and seeks a permanent injunction, penalties, and disgorgements plus interest. The Commodity Futures Trading Commission is also taking action against the broker based on similar conduct.
Sec Charges 1Broker and Its CEO for Security-Based Swaps Funded With Bitcoins was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.