The SEC Charges Founder of American Bitcoin Academy with Fraud
The U.S. Securities and Exchange Commission (SEC) has filed charges against Brian Sewell, the founder of the American Bitcoin Academy, for operating a fraudulent cryptocurrency scheme. According to the SEC, Sewell’s scheme defrauded students out of approximately $1.2 million by promising to teach them about cryptocurrency investing.
The Rockwell Fund: A Non-Existent Hedge Fund
Sewell’s scheme revolved around the Rockwell Fund, a hedge fund that he claimed would generate significant returns using advanced technologies and trading strategies with crypto assets. However, the SEC alleges that from 2018 to 2019, Sewell used his Bitcoin trading course as a means to convince students to invest in the non-existent fund.
False Promises and Misuse of Funds
Sewell, originally from Utah and later residing in Puerto Rico, attracted investments from 15 students by promising substantial profits through his cutting-edge fund. However, he never implemented the advertised strategies and tools. Instead, he used the students’ money to buy Bitcoin for himself. Unfortunately for Sewell, his digital wallet was hacked, resulting in a complete loss of the funds.
SEC’s Response: Holding Sewell Accountable
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasized the severity of Sewell’s actions and stated that the SEC will continue to hold accountable those who use buzzwords like AI and crypto to defraud investors. Both Sewell and the American Bitcoin Academy have agreed to settle the charges without admitting or denying the allegations.
Importance of Due Diligence for Investors
The SEC highlighted this case as a reminder for potential investors to exercise due diligence and verify the credibility of investment opportunities, particularly those that involve new technologies like AI and cryptocurrency. The SEC has mandated Rockwell Capital Management to disgorge its ill-gotten gains, while Sewell may face a civil penalty pending court approval.
Hot Take: Lessons Learned from the American Bitcoin Academy Fraud Case
The recent charges against Brian Sewell and the American Bitcoin Academy serve as a cautionary tale for investors in the crypto space. This case underscores the importance of conducting thorough due diligence and verifying the legitimacy of investment opportunities, especially when they involve emerging technologies like AI and cryptocurrency.
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