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The US SEC slaps Bitcoin-backed dealer with charges of violation of securities laws

The United States Securities and Exchange Commission (SEC) has accused Patrick Brunner and platform 1pool of violating national securities laws.

The US Securities and Exchange Commission (SEC) has filed a complaint charge against 1pool Limited.

According to a press release published by the SEC, the accusation against the international securities dealer and its CEO are for violating federal securities laws. The charge is that the company was offering security-based swaps which were funded with Bitcoin.

The case, which is against CEO Patrick Brunner and his company, states that 1pool Limited, working in association with 1Broker, registered in the Republic of the Marshall Islands. According to the press release, the parties solicited both US and international investors to buy and sell security-based swaps.

The complaint has been filed under the US District Court for the District of Columbia. The case is seeking permanent injunctions and disgorgement plus interest. The SEC is also hoping to claim penalties from the company and CEO.

The SEC explained that investors could open accounts with only an email address and a username with no other information required. From there, they could fund only their account using Bitcoin. According to the SEC, a Federal Bureau of Investigation Special Agent went undercover in order to use the platform. The findings of the agent showed that individuals could buy several security-based swaps on the company’s platform. This could happen despite not meeting discretionary investment thresholds necessary to pass the federal securities laws.

Furthermore, the commission states that Brunner and 1Broker failed to perform the security-based swaps using a registered national cryptocurrency exchange. The company also failed to register legally as a security-based swaps dealer

Director of the SEC’s Fort Worth Regional Office Shamoil T. Shipchandler spoke on the matter, saying:

“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.”