The Securities and Exchange Commission (SEC) filed charges against an international securities dealer and its Chief Executive Officer (CEO), who is based out of Austria. The charges were filed for alleging violating the federal securities laws in regard to securities-based swaps that are funded by bitcoin.
The company, 1 Pool Ltd, also known as 1 Broker, which is registered in the Republic of Marshall Islands and the CEO, Patrick Brunner lured in investors from across the United States and other parts of the world to buy and sell security-based swaps.
How this would work is this: Investors could open an account with just username and email address- minus any account verification, and fund their account with bitcoin. This came to light when a Special Agent working with Federal Bureau of Investigation signed up on the platform as a ‘prospective’ customer, purchased different security-based swaps, despite not following any rules pertaining to purchasing securities.
Commenting on the development, Shamoil T. Shipchandler, Director of the SEC’s Fort Worth Regional Office said, “The SEC protects U.S. investors across a variety of platforms, regardless of the type of currency used in their transactions. International companies that transact with U.S. investors cannot circumvent compliance with the federal securities laws by using cryptocurrency.”
The complaint was filed in the U.S. District Court for the District of Columbia, sought permanent injunctions, penalties, and disgorgement plus interest. In a similar vein, the Commodity Futures Trading Commission (CFTC) had also filed charges against 1 Broker for similar business conduct.
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