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(Bloomberg) – The founder of an online cryptocurrency trading course called American Bitcoin Academy defrauded students of more than $1 million by convincing them to invest in a fake hedge fund, the Securities and Exchange Commission alleged Friday. did.
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From December 2017 to April 2018, Brian Sewell allegedly solicited investments for the Rockwell Fund, which invests in digital assets using proprietary strategies and tools, including artificial intelligence.
In a news release announcing the settlement of the case, the SEC said Sewell exchanged his investment funds for Bitcoin instead of starting a fund, but lost the Bitcoin when the wallet he was using was hacked. He also deceived investors about the fund’s existence by sending false monthly financial statements.
Sewell’s fraud scheme ultimately cost 15 students about $1.2 million, regulators said.
“Whether it’s AI, cryptocurrencies, DeFi, or other buzzwords, the SEC will continue to hold accountable those who claim to be using high-profile technologies to attract and defraud investors.” said Gurbir Grewal, director of the SEC’s Division of Enforcement. news release.
Mr. Sewell and his firm, Rockwell Capital Management, agreed to a settlement with regulators without admitting or denying the charges. As part of the deal, Rockwell Capital agreed to pay $1.6 million and Sewell more than $200,000.
Sewell, who is listed as the company’s media representative, did not respond to requests for comment. According to the SEC complaint, he lived in Utah before moving to Puerto Rico.
This enforcement action is the latest in a series of lawsuits brought by the agency related to digital assets. SEC Chairman Gary Gensler has repeatedly warned investors that the cryptocurrency industry is rife with fraud.
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