Another day, another SEC digital asset lawsuit.
Today, Wall Street’s top regulator announced that an American cryptocurrency entrepreneur has agreed to settle fraud allegations against an online course he promoted called “American Bitcoin Academy.”
The Securities and Exchange Commission (SEC) alleged on Friday that Brian Sewell and his company, Rockwell Capital Management, targeted students to invest in AI-powered cryptocurrency hedge funds to help them make a lot of money.
But after receiving $1.2 million from 15 students in alleged fraud, Sewell, 51, and his company kept the cash in the form of Bitcoin (BTC) and never launched the fund.
According to the SEC later, BTC was eventually stolen in a hack and all invested cash was lost.
The complaint claimed that Sewell “converted investors’ funds into Bitcoin and stored them, but the cryptocurrency wallet that stored the assets was hacked and looted, and all funds were lost.”
“Sewell concealed the hack and losses from victim investors to prevent the fraud from being uncovered,” the complaint alleges.
Sewell later agreed to settle the charges without admitting or denying them.
Defendant Rockwell Capital Management agreed to pay clawbacks and prejudgment interest totaling $1,602,089, and Sewell agreed to a civil penalty of $223,229, the regulator added.
SEC Enforcement Director Gurbir S. Grewal said: “We allege that Sewell defrauded students at the online American Bitcoin Academy out of over $1 million through a series of lies about investment opportunities for his cryptocurrency hedge fund.”
He added that Sewell told students how much money they could make through his online American Bitcoin Academy cryptocurrency course, but that “never existed.”
“The SEC will continue to hold accountable those who use attention-grabbing technologies, whether AI, cryptocurrency, DeFi, or other buzzwords, to lure and defraud investors,” Grewal warned.
Edited by Ryan Ozawa.