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CFTC, SEC and FBI Charge Bitcoin (BTC) Dealer, 1Broker

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1Broker fraud

Three U.S. agencies took action again Bitcoin-funded, 1pool Ltd., otherwise knows as 1Broker.

For instance, the U.S. SEC charges that 1Broker violated federal securities laws.  The Commodity Futures Trading Commission (CFTC) says 1Broker violated the Commodity Exchange Act. Even the U.S. FBI seized the company’s domain, alleging on money laundering, operating as an unregistered broker, and operating as a unregistered futures commissions merchant.

A Good Deal of Trouble

The SEC has already filed charges against the company and its CEO, Patrick Brunner.

The agency charges him for “allegedly violating the federal securities laws in connection with security-based swaps funded with bitcoins.”  According to the SEC, investors could open accounts by providing an email address and a user name and could only fund their account using bitcoins.  “The commission further alleges that Brunner and 1Broker failed to transact these swaps “on a registered national exchange, and failed to properly register as a security-based swaps dealer.”

As a result, the SEC is seeking permanent injunctions, disgorgement plus interest and penalties.

In short, things are about to get ugly — and fast — for Brunner and company.

CFTC’s Action

In addition, on top of the SEC findings, the CFTC filed a civil enforcement action against the company, and Brunner.

“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.”

The agency is also seeking disgorgment, civil monetary penalties, restitution, permanent registration and trading bans.

The FBI is Piling On, Too

In addition, the FBI seized the domain. A notice on the agency’s website states three violations: money laundering, “willfully operating as an unregistered broker/dealer of securities,” and “willfully operating as an unregistered futures commission merchant.” An FBI seizure notice now appears on the website.

According to 1Broker

According to the company, all funds are secure and they will fully cooperate with the authorities.



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