- Telecommunications Giant Vodafone Leaves the Libra Association
- Group of Central Banks Assesses Developing Central Bank Digital Currencies
- South Korea Might Impose 20 Percent Tax on Cryptocurrency Profits
- Report: Terrorists Increasingly Use Crypto to Raise Funds Anonymously
- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
1Broker, also known as 1Pool Ltd., has been recently charged by the U.S. Securities and Exchange Commission (SEC) for violation of the federal securities laws.
The company and its Austria-based CEO, Patrick Brunner, were charged for money laundering and willfully operating as an unregistered broker/dealer of securities.
In a bid to circumvent compliance with the federal securities laws, 1Broker (a securities dealer registered in the Republic of The Marshall Islands) operated a platform that allowed investors, both in the United States and the World at large, to buy and sell securities using Bitcoin funding. No discretionary investment thresholds were put in place, and an investor only needed a username and an email address to be involved in the security-based swaps.
Luckily for crypto-investors and unluckily for the fraudulent platform, a Special Agent who was working as an undercover agent for the Federal Bureau of Investigation (FBI), joined the platform just like any other crypto-investor and participated in the purchase of several security-based swaps. The agent was able to uncover the way trades are being carried out in the platform without meeting the required discretionary investment thresholds.
Although it is a registered company, the company is not registered for national exchange neither is it properly registered as a security-based swaps dealer.
There are laws guiding transactions between international companies and U.S. investors and this company clearly broke those federal securities laws, which prompted the FBI to seize the 1Broker.com domain.
According to the Director of the SEC’s Fort Worth Regional Office, Shamoli T. Shipchandler, the primary focus of the SEC is to protect U.S. investors across a wide range of platforms irrespective of the type of currency involved in the transaction – whether cryptocurrency or fiat currency. All international companies that transact with the U.S. investors must comply with the federal securities laws. They cannot bypass these laws by using cryptocurrency, Shipchandler added.
According to case number 1:18-CV-2243 filed in the United States District Court for the District of Columbia, the Commodity Futures Trading Commission has also laid a complaint on the same counts against 1Pool Ltd.
The SEC in its complaint seeks permanent injunctions, disgorgement with interest, and penalties for the conducts of 1Broker and its Austria-based CEO, Patrick Brunner (the defendants) and any other person associated with them.
This is good news to the denizens of the crypto-world. It is yet another exemplary case that shows that the SEC does attempt to protect American investors from cryptocurrency scams as well. So, before the public draws their conclusion based on figures, they should consider the efforts made by the Commission too.