Brian Sewell, the founder of the American Bitcoin Academy, is now under scrutiny by the U.S. Securities and Exchange Commission (SEC) for his alleged involvement in a fraudulent scheme. The SEC claims that Sewell, along with his company Rockwell Capital Management, deceived students who had enrolled in his cryptocurrency trading course, resulting in a substantial loss of $1.2 million for them.
The Deceptive Scheme Unveiled
According to the SEC investigation, from 2018 to mid-2019, Sewell purportedly urged hundreds of students enrolled in the American Bitcoin Academy to invest their money into the Rockwell Fund. He promised them significant returns by utilizing advanced technologies, like artificial intelligence and crypto trading strategies. However, it appears that things were not as they seemed.
False Promises and Bitcoin Losses
The SEC filed a complaint against Sewell for failing to deliver on his promises of launching the fund and implementing advanced trading strategies. Instead, it is claimed that he kept investors’ funds in Bitcoin without informing them about this decision. Regrettably, these Bitcoin holdings were reportedly lost due to a hacking incident affecting Sewell’s wallet.
Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, emphasized the seriousness of the situation. He alleges that Sewell deceived students by making claims about investment opportunities in his supposed crypto hedge fund. One of these claims was that his investment strategies were guided by his “artificial intelligence” and “machine learning” technology even though neither the technology nor the fund actually existed.
Settlement and Penalties
To resolve the SEC’s charges both, Sewell and Rockwell Capital Management, have agreed to settle the case. However, they did not admit or deny the allegations. As part of the settlement terms, Sewell will face a penalty of $223,229. Rockwell Capital Management will be required to disgorge and pay prejudgement interest totaling $1,602,089.
This case serves as a warning to investors to be cautious when considering cryptocurrency and online trading opportunities. It emphasizes the importance of conducting proper research before making any investments. Be wary of investment opportunities that promise high returns through advanced technologies. The SEC is committed to holding those accountable who use attention-grabbing technologies for nefarious purposes, as demonstrated by this enforcement action.
In light of the efforts by the SEC to combat fraudulent activities in the cryptocurrency industry, the recent case of Bitcoin Academy fraud is a clear reminder for investors to stay alert and skeptical. This incident highlights the significance of conducting research and verification before investing in any online cryptocurrency courses or schemes. It further underscores the role played by the SEC in protecting investors from deceptive practices.