The Founder of the American Bitcoin Academy, Brian Sewell, is currently under the scrutiny of the Securities and Exchange Commission (SEC) due to allegations of fraudulent activities targeting his students.
Operating initially from Hurricane, Utah, and later relocating to Puerto Rico, Sewell managed to entice hundreds of students into investing in his supposed Rockwell Fund, according to Bloomberg.
He promised revolutionary investment strategies based on artificial intelligence and machine learning, assuring them of substantial profits within the volatile cryptocurrency market.
However, investigations into Sewell’s operations unveiled a fraudulent scheme.
It was revealed that Sewell had never actually launched the fund nor implemented any of the advanced technologies he had boasted about.
According to the SEC, 15 students, lured by Sewell’s enticing promises, invested a total of $1.2 million into a hedge fund that did not exist.
Gurbir Grewal, the Director of the SEC’s Division of Enforcement, expressed, “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.”
Grewal went on to emphasize the false claims made by Sewell regarding his investment strategies, supposedly guided by non-existent ‘artificial intelligence’ and ‘machine learning’ technology.
The SEC vowed to hold accountable individuals who misuse attention-grabbing technologies to deceive investors, regardless of the industry, be it AI, cryptocurrency, DeFi, or any other buzzword.
Rather than fulfilling his commitments, Sewell allegedly retained the funds in Bitcoin, which were subsequently stolen when his digital wallet fell victim to hacking.
The SEC filed a complaint in the U.S. District Court for the District of Delaware, accusing Sewell and Rockwell Capital Management of violating antifraud provisions of federal securities laws.
In response to the allegations, Sewell and his company have consented to injunctive relief without admitting or denying guilt.
Rockwell Capital Management agreed to disgorge $1,602,089, in addition to prejudgment interest, while Sewell is facing a civil penalty of $223,229, pending court approval.
Recently, the SEC attributed the unauthorized post declaring the approval of Bitcoin ETFs to a “SIM swap” attack involving the unauthorized transfer of a mobile phone number to a different device.
This security breach, executed externally through a telecommunications network, generated widespread panic within the cryptocurrency sector.