The United States Securities and Exchange Commission (SEC) sues the founder of Bitcoin Academy for $1.2 million in fraud.
In a new foray into the world of cryptocurrencies, the United States SEC announced a lawsuit against the founder of Bitcoin Academy. The agency accuses Brian Sewell of running an online fraudulent crypto scheme that cost students $1.2 million.
Gurbir S. Grewal, director of the SEC’s Enforcement Division, highlighted the egregious nature of Sewell’s conduct, highlighting lies orchestrated to defraud students and misuse of trendy technology terms to mislead investors. Both Sewell and the ABA have agreed to resolve the charges without admitting or denying the SEC’s allegations, accepting injunctive relief.
According to the agency, Sewell encouraged hundreds of his online students to invest in the Rockwell Fund, a hedge fund he promised to launch. The defendant allegedly told his victims that the fund would use advanced technologies such as artificial intelligence. Furthermore, it would rely on crypto asset trading strategies to generate returns for investors.
In any case, the lawsuit alleges that before moving from Utah to Puerto Rico, Sewell received $1.2 million toward the promised fund. However, he never launched the fund or implemented the trading strategies for which he collected the funds from the 15 students. The alleged scammer later claimed that the money had been stolen from their wallets by hackers.
The SEC’s investigation was conducted by Matthew S. Raalf and Jacquelyn D. King with assistance from Gregory Bockin and Karen M. Klotz, all of the Philadelphia Regional Office. It was supervised by Assunta Vivolo, Scott A. Thompson, and Nicholas P. Grippo.
Bitcoin Academy Founder in Legal Trouble
The crux of the agency’s lawsuit against the Bitcoin Academy founder is that he deliberately lied to steal from the 15 people. The officials in charge of drafting the charges explain that the alleged own artificial intelligence and machine learning models never existed.
“We allege that Sewell defrauded students in his online American Bitcoin Academy of over a million dollars through a series of lies about investment opportunities in his purported crypto hedge fund. Among other things, he falsely claimed that his investment strategies would be guided by his own ‘artificial intelligence’ and ‘machine learning’ technology which, like the fund itself, never existed,” said Gurbir S. Grewal, director of the SEC Enforcement Division.
The SEC’s complaint accuses the businessman of violating the anti-fraud provisions of the federal securities laws. Meanwhile, the defendants agreed to resolve the charges and have consented to precautionary measures without admitting or denying the allegations in the complaint.
“The defendant company, Rockwell Capital Management, also agreed to pay disgorgement and prejudgment interest totaling $1,602,089 and defendant Sewell agreed to a civil penalty of $223,229. The settlement is subject to court approval,” noted the agency. With the latter, it seems clear that the founder of Bitcoin Academy has little chance of getting his way.
The SEC cautions investors to check the background of anyone selling them an investment and to always independently research investment opportunities. In this sense, the SEC has issued Investor Alerts on investment frauds touting new technologies.
The story of Brian Sewell and the ABA highlights the critical need for caution and verification when exploring investments in the cryptocurrency market. The SEC continues to focus on protecting investors and enforcing financial laws in the crypto space, underscoring the importance of transparency and due diligence in all transactions.
By Audy Castaneda
