SEC Settles $1.2M Fraud Case with American Bitcoin Academy's Founder, Brian Sewell

The American Bitcoin Academy's founder, Brian Sewell, is under investigation by the Securities and Exchange Commission (SEC) for allegedly defrauding students. Operating from Hurricane, Utah, and later Puerto Rico, Sewell attracted numerous students to invest in his Rockwell Fund, promising impressive returns in the volatile cryptocurrency market through groundbreaking investment strategies based on artificial intelligence and machine learning.

Upon investigation, it was revealed that Brian Sewell never launched the fund or implemented the advanced technologies he claimed. The SEC asserts that 15 students, enticed by Sewell's assurances, invested $1.2 million into a hedge fund that did not exist.

Gurbir Grewal, Director of the SEC's Division of Enforcement, stated, "We allege that Sewell deceived students in his American Bitcoin Academy by falsely presenting investment opportunities in his supposed crypto hedge fund, leading to a loss of over a million dollars. Whether it's AI, crypto, DeFi, or other buzzwords, the SEC will hold accountable those who use attention-grabbing technologies to attract and defraud investors."

Contrary to his promises, Brian Sewell allegedly retained the funds in Bitcoin, which were subsequently stolen due to a hacking incident targeting his digital wallet. The SEC filed a complaint in the U.S. District Court for the District of Delaware, charging Brian Sewell and Rockwell Capital Management with violating federal securities laws' antifraud provisions. Sewell and his company agreed to injunctive relief without admitting or denying the allegations. Rockwell Capital Management is set to disgorge $1,602,089, along with prejudgment interest, while Sewell faces a civil penalty of $223,229, pending court approval.

In a separate incident, the SEC attributed the unauthorized announcement of Bitcoin ETF approvals to a "SIM swap" attack, involving the unauthorized transfer of a mobile phone number to a different device. This external security breach within the telecommunications network triggered widespread concern in the cryptocurrency sector.