SEC, CFTC, FBI Take Action Against Securities Dealer

SEC, CFTC, FBI Take Action Against Bitcoin-Funded Securities Dealer 1Broker

Three U.S. bureaus have taken actions against international bitcoin funded securities trader 1pool Ltd., aka 1Broker. The Securities and Exchange Commission (SEC) states 1Broker violated federal securities legislation. The Commodity Futures Trading Commission (CFTC) states that it violated the Commodity Exchange Act. Meanwhile, the business says it’s working on allowing clients withdraw their capital.

The SEC declared Thursday that it has filed charges against Marshall Islands-registered 1pool Ltd., aka 1Broker, and its own Austria-based CEO, Patrick Brunner,”for supposedly violating the federal securities laws in connection with security-based swaps financed with bitcoins.” The agency clarified:

Investors could open accounts by simply providing an email address and a user name – no additional information was required – and could only fund their account using bitcoins.

The SEC alleges that an undercover special agent with the Federal Bureau of Investigation (FBI)”successfully bought a few security-based swaps on 1Broker’s platform in the U.S. although not fulfilling the optional investment thresholds required by the federal securities laws.” The commission further realised that Brunner and 1Broker failed to transact these swaps”to a documented national exchange, and didn’t properly register as a security-based swaps dealer.”

The SEC’s complaint “seeks permanent injunctions, disgorgement plus interest, and penalties.”

CFTC’s Action

SEC, CFTC, FBI Take Action Against Securities Dealer

On Precisely the Same Afternoon, the CFTC filed a civil enforcement Actions against 1pool Ltd. and Brunner, Saying:

The CFTC’s complaint charges the defendants with engaging in unlawful retail commodity transactions, failing to register as a Futures Commission Merchant (FCM), and supervisory violations for failing to implement procedures to prevent money laundering as required under federal laws and regulations.

From February 2016, the defendants”provided or participated in illicit retail product trades in the shape of’contracts for difference’ (CFDs) which had as inherent assets products,” that the CFTC alleges. Nonetheless, these transactions aren’t conducted in compliance with the Commodity Exchange Act (CEA).

The bureau detailed:

The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the CEA and CFTC regulations as charged.

FBI’s Action & Response from 1Broker

Also on Thursday, the FBI Captured the 1Broker. com domain. A note on the bureau’s site says three crimes: money laundering,”willfully working as an unregistered broker/dealer of securities,” and”willfully working as an unregistered futures commission merchant” An FBI seizure note currently appears on the 1Broker. Com site.

Reacting to the SEC’s Statement, 1Broker tweeted:

All funds are currently secure and we will fully cooperate with the authorities. If approved by the SEC, we will enable withdrawals for US customers as soon as possible.

The business explained that the aforementioned statement”also applies to non-US clients ” 1Broker further realised,”All open places were closed in the current market prices. Market price movements won’t influence your transactions from now on,” noting,”Our top priority today is to have the approval from the SEC to process customer withdrawal requests within an alternate domain”

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