- The SEC has filed charges against 1 Pool.
- The firm was running illegal security swaps funded by bitcoin.
- The operation was discovered by an undercover FBI agent.
1 Pool ltd. has had charges filed against them by the Securities and Exchange Commission for violation of laws guiding security swapping through the use of cryptocurrency.
According to the official statement on the Securities and Exchange website, the Austria-based firm and their CEO Patrick Brunner tried to get U.S investors to buy security swaps by opening accounts and funding them with bitcoin.
The account creation process was remarkably simple and only required a name and email address. The accounts also could only be funded with bitcoins.
This is yet another example of the government becoming more strict with violations relating to cryptocurrency.
The Catch
This scheme was uncovered by a Special Agent with the Federal Bureau of Investigation who went undercover to expose the scheme. Using his undercover identity, he was able to purchase security swaps despite not meeting the requirements imposed by the federal securities laws.
Further violations include the fact that these exchanges took place on an unregistered platform and also the fact that 1 Pool did not formally register as a securities swap dealer.
“The SEC protects U.S. investors across a variety of platforms, regardless of the type of currency used in their transactions,” said Shamoil T. Shipchandler, Director of the SEC’s Fort Worth Regional Office.
A formal complaint against 1 Pool was then filed at the U.S. District Court for the District of Columbia and seeks to impose injunctions, penalties, and disgorgement plus interest.
The charges against 1 Pool haven’t stopped there. The Commodity Futures Trading Commission (CFTC) is also bringing charges against 1 Pool for similar offenses.
Working the Case
The investigation that brought forward the evidence against 1 Pool was conducted by David Hirsch and Morgan Ward Doran, and supervised by Scott Mascianica and Eric R. Werner of the SEC’s Fort Worth Regional Office and was assisted by the Enforcement Division’s Cyber Unit.
Litigation on behalf of the SEC against 1 Pool will be led by Chris Davis and supervised by B. David Fraser.
In the official statement, the SEC also expressed appreciation towards the U.S. Attorney’s Office for the District of Columbia, Department of Justice, Federal Bureau of Investigation, and the CFTC.
