The U.S. Securities and Trade Fee (SEC) has leveled fees towards Brian Sewell, founding father of the American Bitcoin Academy, over a fraudulent cryptocurrency scheme.
In a Feb. 2 press release, the regulator claimed Brian Sewell’s scheme had siphoned roughly $1.2 million from college students eager on studying about cryptocurrency investing.
On the coronary heart of the case is the Rockwell Fund, a hedge fund Sewell claimed would leverage superior applied sciences like AI and bespoke buying and selling methods with crypto belongings to ship spectacular returns to its traders.
In keeping with the SEC, from early 2018 to mid-2019, Sewell’s course, purportedly geared toward demystifying the complexities of Bitcoin (BTC) buying and selling, turned a funnel for inducing his college students to spend money on the non-existent Rockwell Fund.
Sewell, initially from Hurricane, Utah, and later a resident of Puerto Rico, gathered sizeable investments from 15 college students with guarantees of considerable earnings by way of his supposedly cutting-edge fund.
Nevertheless, the entrepreneur by no means deployed the methods and complex instruments he marketed, and the fund by no means took off. As a substitute, Sewell used the cash acquired from the scholars to purchase Bitcoin for himself.
In an ironic twist, Sewell’s digital pockets, holding the Bitcoin he’d purchased, was hacked, main to an entire lack of the funds.
The SEC’s Division of Enforcement Director, Gurbir S. Grewal, underscored the egregious nature of Sewell’s conduct, stating the orchestration of lies to defraud college students and the misuse of technological buzzwords like AI and crypto to deceive traders.
Whether or not it’s AI, crypto, defi or another buzzword, the SEC will proceed to carry accountable those that declare to make use of attention-grabbing applied sciences to draw and defraud traders.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement
Each Sewell and the ABA have agreed to settle the fees with out admittance or denial of the SEC’s allegations, and so they have consented to injunctive reduction.
Notably, the SEC has mandated Rockwell Capital Administration to disgorge its ill-gotten good points plus prejudgment curiosity totaling $1.6 million, whereas Sewell faces a civil penalty value over $223,000, pending courtroom approval.
The company identified that the case was a stark reminder to potential traders of the significance of exercising due diligence and verifying the credibility of funding alternatives, particularly those who tout the attract of recent and rising applied sciences like AI and cryptocurrency.