Founder of American Bitcoin Academy Faces SEC Charges in $1.2m Cryptocurrency Fraud Scheme
The American Bitcoin Academy’s founder, Brian Sewell, has been charged by the U.S. Securities and Exchange Commission (SEC) for operating a fraudulent cryptocurrency scheme, as announced in a press release on February 2. The SEC alleges that Sewell’s scheme deceived students who were eager to learn about cryptocurrency investing, resulting in the siphoning of approximately $1.2 million.
The focal point of the case is the Rockwell Fund, a hedge fund that Sewell claimed would utilize advanced technologies such as AI and customized trading strategies with crypto assets to generate impressive returns for investors. From early 2018 to mid-2019, Sewell’s course, which purportedly aimed to demystify Bitcoin trading, instead coerced students into investing in the non-existent Rockwell Fund, according to the SEC.
Sewell, who is originally from Hurricane, Utah, and later became a resident of Puerto Rico, managed to gather substantial investments from 15 students by promising them substantial profits through his supposedly innovative fund. However, Sewell never implemented the strategies and advanced tools he advertised, and the fund never materialized. Instead, he used the money received from students to purchase Bitcoin for himself.
In an ironic turn of events, Sewell’s digital wallet, containing the Bitcoin he had acquired, was hacked, resulting in a complete loss of the funds. Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, emphasized the deceptive nature of Sewell’s actions, highlighting the orchestration of lies to defraud students and the manipulation of technological buzzwords like AI and cryptocurrency to deceive investors.
Both Sewell and the American Bitcoin Academy have agreed to settle the charges without admitting or denying the SEC’s allegations, and they have consented to injunctive relief. It is worth noting that the SEC has ordered Rockwell Capital Management to return its illicit gains, along with prejudgment interest amounting to $1.6 million, while Sewell faces a civil penalty exceeding $223,000, subject to court approval.
The SEC emphasized that this case serves as a stark reminder to potential investors about the importance of conducting due diligence and verifying the credibility of investment opportunities, especially those that promote the allure of new and emerging technologies like AI and cryptocurrency.
