Another day, another SEC digital assets-related lawsuit.
Today, Wall Street’s top regulator announced that a U.S. crypto entrepreneur has agreed to settle fraud charges for an online course he promoted called “American Bitcoin Academy.”
The SEC (Securities and Exchange Commission) on Friday alleged that Brian Sewell and his company, Rockwell Capital Management, had targeted students to invest in an AI-powered crypto hedge fund so they could make lots of money.
But after receiving $1.2 million from 15 students in the allegedly fraudulent scheme, 51-year-old Sewell and his company held onto the cash in the form of Bitcoin (BTC) and never launched the fund.
Later, according to the SEC, the BTC was eventually stolen in a hack—with all the invested cash disappearing.
The complaint alleged that Sewell “converted and held investors’ funds in Bitcoin, and then he lost it all when the crypto asset wallet he used to hold those assets was hacked and looted.”
“Sewell concealed the hack and losses from the victim investors to prevent the fraud from unraveling,” the complaint further alleged.
Sewell has since agreed to settle the charges without admitting or denying the allegations.
Defendant Rockwell Capital Management agreed to pay disgorgement and prejudgment interest totaling $1,602,089 and while Sewell agreed to a civil penalty of $223,229, the regulator added.
Director of the SEC’s enforcement division Gurbir S. Grewal said: “We allege that Sewell defrauded students in his online American Bitcoin Academy of over a million dollars through a series of lies about investment opportunities in his purported crypto hedge fund.”
He added that Sewell allegedly told students how much money his online American Bitcoin Academy crypto course would make them—but it “never existed.”
“Whether it’s AI, crypto, DeFi or some other buzzword, the SEC will continue to hold accountable those who claim to use attention-grabbing technologies to attract and defraud investors,” Grewal warned.
Edited by Ryan Ozawa.
Stay on top of crypto news, get daily updates in your inbox.