The US SEC and CFTC are charging a Marshal Island-based securities dealer to reportedly violate the federal law via a bitcoin-based security swap scheme.
The Securities and Exchange Commission declared in a Press Release that it lodged the charges against 1pool ltd. Also acclaimed as 1Broker, and its CEO Patrick Brunner to sell security-based swaps to the US as well as international investors without following proper discretionary investment thresholds. Prominently, the investors could just purchase these swaps with bitcoin, as indicated in the claims.
The Securities and Exchange Commission is further claiming that 1Broker wasn’t registered as a Security-Based Swaps Dealer and “failed to transact its security-based swaps on a registered national exchange”.
The SEC added, “The SEC alleges that a Special Agent with the Federal Bureau of Investigation, acting in an undercover capacity, successfully purchased several security-based swaps on 1Broker’s platform from the U.S. despite not meeting the discretionary investment thresholds required by the federal securities laws.”
The director of SEC’s Fort Worth, Shamoil Shipchandler stated that “the SEC protects U.S. investors across a variety of platforms, regardless of the type of currency used in their transactions … International companies that transact with U.S. investors cannot circumvent compliance with the federal securities laws by using cryptocurrency.”
The regulator is searching for an unchanging injunction against 1pool and Brunner, alongside penalties and disgorgement plus interest.
Also, the CFTC lodged similar charges against 1Broker for violating federal laws by failing to implement the anti-money laundering as well as supervisory features.
Later on, the FBI reported that it had seized the 1broker.com domain by claiming that the company has violated the money laundering as well as wire fraud laws, in addition to “operating as an unregistered dealer of securities” and “operating as an unregistered futures commission merchant”.
However, 1Broker didn’t quickly respond to a request for the comment on this matter.