Crypto Entrepreneur Settles Fraud Charges After Targeting Students with False Promises

Sentiment: Negative

SEC settles with Brian Sewell over $1.2 million crypto fraud, highlighting the risks of fraudulent schemes in the digital asset market.

In a recent development in the fight against digital asset-related misconduct, the U.S. Securities and Exchange Commission (SEC) has reached a settlement with Brian Sewell, a prominent crypto entrepreneur, and his company, Rockwell Capital Management. The charges revolve around the alleged creation of a fraudulent online course called the "American Bitcoin Academy", promising students lucrative AI-powered crypto hedge fund investments.

According to the SEC complaint, Brian Sewell and Rockwell Capital successfully raised $1.2 million from 15 students by misleadingly asserting the launch of an AI-driven crypto hedge fund. Contrary to their promises, the complaint alleges that Sewell retained the funds in Bitcoin (BTC) without launching the purported fund. Shockingly, the BTC holdings were subsequently stolen in a hack, resulting in the complete loss of investors' funds.

Gurbir S. Grewal, Director of the SEC's Enforcement Division, expressed the SEC's position on the matter. "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", he stated. The accusations further include Sewell's promises of significant returns from the non-existent hedge fund and exaggerations regarding the profitability of the online course.

In a notable turn of events, Sewell settled the charges without admitting or denying the allegations. As part of the settlement, both Sewell and Rockwell Capital have agreed to pay a total of $1,825,318, encompassing disgorgement, prejudgment interest, and a civil penalty for Sewell. This resolution serves as a critical reminder for investors to exercise caution when encountering individuals or entities capitalizing on popular tech trends such as AI and crypto to make unrealistic investment promises.

• Fraudulent Scheme Unveiled: Brian Sewell and Rockwell Capital allegedly defrauded students of $1.2 million through a false crypto hedge fund scheme.

• AI-Powered Fund Never Materialized: The promised AI-powered fund never materialized, and the invested funds were lost in a hack.

• Settlement Agreement: Sewell settled the SEC charges without admitting or denying the allegations and agreed to pay over $1.8 million.

This case serves as a stark reminder of the importance of investor caution, particularly when dealing with individuals leveraging trendy tech terms for potentially fraudulent schemes. As the crypto landscape continues to evolve, staying informed and vigilant remains crucial to safeguarding investments in this dynamic and sometimes treacherous market.