Home Ponzi & Scams SEC Charges Crypto Instructor for $1.2 Million Scam, Issues Warning Against Deceptive Practices

SEC Charges Crypto Instructor for $1.2 Million Scam, Issues Warning Against Deceptive Practices

In a significant development, the United States Securities and Exchange Commission (SEC) has charged crypto trading course instructor Brian Sewell with misleading 15 students into investing $1.2 million in a nonexistent hedge fund. Sewell, the founder of Rockwell Capital Management, promised cutting-edge technology, including artificial intelligence (AI) and machine learning, for lucrative returns. However, the fund was never launched, and the invested funds were left in Bitcoin, later stolen due to Sewell’s crypto wallet being hacked. This case has prompted the SEC to issue a warning against crypto scammers exploiting buzzwords and making false claims.

Allegations Against Brian Sewell:

The SEC has filed a complaint against Brian Sewell, accusing him of encouraging investors to invest $1.2 million in a hedge fund that was never established. Sewell allegedly promised to use advanced technologies like AI and machine learning to execute profitable trading strategies. However, the fund was never launched, and investors’ funds were left in Bitcoin. The SEC’s investigation revealed that the Bitcoin holdings were stolen when Sewell’s digital wallet was hacked.

SEC’s Warning Against Crypto Scammers:

In response to Sewell’s case, the SEC has issued a broader warning against scammers operating in the cryptocurrency industry. The regulatory body aims to take decisive action against individuals and entities exploiting industry hype and making false claims about using innovative technologies. The SEC emphasized its commitment to holding accountable those who use attention-grabbing technologies to defraud investors. This stern warning underscores the SEC’s dedication to investor protection and market integrity.

Rockwell Capital Management’s Restitution:

Rockwell Capital Management, the entity associated with Brian Sewell, has agreed to return the entire $1.2 million to the deceived investors. Additionally, prejudgment interest totaling approximately $402,000 will be paid as restitution. This step is significant in compensating affected individuals for their losses and rectifying the situation. If the court approves the settlement, Brian Sewell will also face a civil penalty of $223,229, holding him personally accountable for his actions.

CFTC’s Advisory to Crypto Investors:

The Commodities and Futures Trading Commission (CFTC) has issued a warning to crypto investors, cautioning them against exaggerated promises from AI trading bots and other technology-driven schemes. The advisory specifically addresses unrealistic claims made by individuals and entities using AI-driven trading bots, trade signal algorithms, crypto-asset arbitrage algorithms, and other AI-assisted technologies. The CFTC emphasizes the importance of investors conducting thorough due diligence and exercising discretion when considering investment opportunities in the crypto industry.

Conclusion:

The case involving Brian Sewell serves as a stark reminder of the risks associated with the cryptocurrency market and the prevalence of fraudulent activities. The SEC’s charges and subsequent warnings reflect a commitment to maintaining investor trust and market integrity. As regulators take proactive measures to address deceptive practices, investors are urged to exercise caution, conduct thorough research, and remain vigilant in the dynamic and evolving landscape of the crypto industry.

Read more about:
Share on

Evie

Evie is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs.

Rate this article 0 / 5. 0

Leave a Reply

Your email address will not be published. Required fields are marked *

Crypto newsletter

Get the latest Crypto & Blockchain News in your inbox.

By clicking Subscribe, you agree to our Privacy Policy.