In most recent news, the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have announced in a press release that they are suing 1pool Ltd., a Marshall Islands-based securities retailer for allegedly breaking federal law through a bitcoin-based security swap scheme.
The SEC has filed charges against the CEO Patrick Brunner of 1pool Ltd., commonly known as 1Broker as well, citing that the securities company was not registered a “security-based swaps dealer” and “failed to transact its security-based swaps on a registered national exchange.” Moreover, the charges filed against them are for selling security-based swaps to American as well as international investors without following proper “discretionary investment thresholds.” Apparently, investors were able to buy these swaps only with BTC. In addition to that, the CFTC charges filed against 1Broker are under similar reasons as breaking federal laws by failing to enforce anti-money laundering and supervisory features.
In a statement released to the public, SEC explained how they have managed to uncover such deeds:
“The SEC alleges that a Special Agent with the Federal Bureau of Investigation, acting in an undercover capacity, successfully purchased several security-based swaps on 1Broker’s platform from the U.S. despite not meeting the discretionary investment thresholds required by the federal securities laws.”
The director of the SEC’s office in Fort Worth, Shamoil Shipchandler has expressed in a statement that SEC’s duty is to protect US traders across various platforms, regardless of the type of currency used in their transactions, adding as well that international companies that trade with U.S. investors cannot bypass nor avoid compliance with the federal securities laws by using cryptocurrency. Shamoil hopes for a permanent injunction against 1Broker and its CEO as well as penalties and “disgorgement plus interest.”
Subsequently, the FBI revealed it had seized the 1broker.com domain, citing that the company had broken federal laws such as money laundering and wire fraud laws, along with operating as an unregistered broker of securities and as an unregistered futures commission dealer.
As of yet, 1Broker hasn’t released any comments regarding the case.