US SEC and CFTC charge bitcoin-funded securities dealer and CEO

The US Securities and Exchange Commission and the Commodity Futures Trading Commission have filed charges against Marshall 1Broker and its CEO Patrick Brunner for allegedly soliciting investors in the USA and around the world to buy and sell security-based swaps in breach of securities laws

What has happened?

The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are suing a securities dealer and its CEO for allegedly violating federal securities laws in connection with security-based swaps funded with bitcoins.

What does this mean?

In a press release, the SEC announced that it had filed charges against Marshall Islands-based 1pool Ltd, also known as 1Broker, and its Austria-based CEO Patrick Brunner for soliciting investors in the USA and around the world to buy and sell security-based swaps.

According to the complaint, investors could open accounts by giving only an email address and a user name, and no additional information was required.

An undercover Federal Bureau of Investigation agent purchased several security-based swaps on 1Broker’s platform from the US "despite not meeting the discretionary investment thresholds required by the federal securities laws".

"The SEC also alleges that Brunner and 1Broker failed to transact its security-based swaps on a registered national exchange, and failed to properly register as a security-based swaps dealer," the SEC added.

The SEC seeks permanent injunctions, disgorgement plus interest and penalties.

In a parallel action, the CFTC also filed charges against 1Broker and Brunner for similar violations.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

Contacts
Gregory Lisa
Partner
Washington D.C.
Languages English
Topics Blockchain
Countries United States

 

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