In a striking revelation, the U.S. Securities and Exchange Commission (SEC) has brought forth charges against the founder of the American Bitcoin Academy, Brian Sewell, for orchestrating a cryptocurrency fraud that duped investors out of $1.2 million.

The SEC’s Case Against Sewell

The SEC’s official statement, dated February 2nd, details the fraudulent activities of Sewell, whose educational courses on Bitcoin investing were nothing more than a ruse to encourage students to pour money into the fictitious Rockwell Fund. Claiming to utilize advanced AI and bespoke trading strategies, Sewell promised substantial returns on investments in crypto assets.

From Educational Courses to Fraudulent Schemes

Over the course of 2018 and 2019, Sewell’s program, which was supposed to simplify the intricacies of Bitcoin trading, instead served as a conduit for misleading his students into investing in the non-existent fund.

False Promises and Misused Technologies

Despite his claims of employing sophisticated tools and strategies, Sewell did not invest the funds as promised. The capital, amassed from 15 unsuspecting students under the guise of innovation, was instead used by Sewell to purchase Bitcoin for his personal gain.

A Twist of Irony

In a twist of fate, the Bitcoin holdings Sewell had acquired were stolen due to a hack of his digital wallet, resulting in a total loss of the funds.

SEC’s Stance on Technological Exploitation

Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, condemned the deceitful actions of Sewell, highlighting the misuse of buzzwords like AI and cryptocurrency to entrap investors.

Consequences and Settlements

Sewell and the American Bitcoin Academy have settled the charges with the SEC without admitting or denying the allegations. They have agreed to injunctive relief, with Rockwell Capital Management ordered to disgorge the misappropriated funds plus interest, totaling $1.6 million. Additionally, Sewell faces a civil penalty exceeding $223,000, subject to court approval.

A Cautionary Tale for Investors

The SEC’s case serves as a stern reminder to investors about the necessity of performing due diligence and the importance of validating the legitimacy of investment opportunities, particularly those involving new and emergent technologies.