SEC Settles Fraud Charges with Crypto Entrepreneur Over Online Course
The Securities and Exchange Commission (SEC) has announced that Brian Sewell, a U.S. crypto entrepreneur, has agreed to settle fraud charges related to his online course, “American Bitcoin Academy.” The SEC alleged that Sewell and his company, Rockwell Capital Management, targeted students to invest in an AI-powered crypto hedge fund with promises of high returns. However, after receiving $1.2 million from 15 students, Sewell and his company did not launch the fund and held onto the cash in Bitcoin. Eventually, the BTC was stolen in a hack, resulting in the loss of all the invested funds.
Fraudulent Scheme and Concealment of Losses
The SEC complaint stated that Sewell converted investors’ funds into Bitcoin and then lost it all when the wallet holding those assets was hacked. He allegedly concealed the hack and losses from the investors to prevent detection. Sewell has agreed to settle the charges without admitting or denying the allegations. Rockwell Capital Management will pay disgorgement and prejudgment interest totaling $1,602,089, while Sewell will face a civil penalty of $223,229.
SEC’s Response and Warning
Gurbir S. Grewal, Director of the SEC’s enforcement division, emphasized that Sewell defrauded students through lies about investment opportunities in his crypto hedge fund. Grewal warned that the SEC will hold accountable those who use attention-grabbing technologies like AI and crypto to attract and defraud investors.
Hot Take: Crypto Fraud Continues to Attract Regulatory Attention
This case is another example of regulatory action against fraudulent activities in the crypto industry. It highlights the need for investors to exercise caution and conduct thorough due diligence before investing in crypto-related schemes. The SEC’s enforcement division remains committed to protecting investors and holding accountable those who deceive them with false promises of high returns. As the crypto market grows, it is crucial for regulators to maintain vigilance and ensure that bad actors are brought to justice.
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