By
Godfrey Benjamin
April 20th, 2024
The 1Broker.com domain has been seized by the Federal Bureau of Investigation with the investigative agency levying further charges of wire fraud and money laundering.
1pool Ltd. a/k/a 1Broker and its CEO Patrick Brunner are now facing severe charges by the U.S. Securities and Exchange Commission (SEC). The Marshall Islands-registered company is charged for allegedly violating federal laws pertaining to the Bitcoin-funded security-based swaps.
1Broker.com allowed investors to participate in the real-world market with investment instruments like a commodity, stock, and index markets, directly using Bitcoins. However, the platform allowed investors to participate in the market without doing necessary KYC/AML checks.
SEC Filing Follows 1Broker Domain Seizure by FBI
In the official press release, the SEC noted that the company “solicited investors from the United States and around the world to buy and sell security-based swaps” without following proper “discretionary investment thresholds.” The SEC also charged the platform for not registering itself as a “security-based swaps dealer” and further failing to transact the swaps on a registered national or international exchange. The agency notes:
“The SEC alleges that a Special Agent with the Federal Bureau of Investigation, acting in an undercover capacity, successfully purchased several security-based swaps on 1Broker’s platform from the U.S. despite not meeting the discretionary investment thresholds required by the federal securities laws.”
While commenting on the SEC’s stand, Shamoil Shipchandler, director of the SEC’s Fort Worth regional office, said:
“The SEC protects U.S. investors across a variety of platforms, regardless of the type of currency used in their transactions. International companies that transact with U.S. investors cannot circumvent compliance with the federal securities laws by using cryptocurrency.”
The SEC is not at all willing to let this matter go easy and wants to set a new precedence. The securities watchdog along with CFTC is seeking “permanent injunctions,” against 1pool and Brunner, in addition to other financial penalties. Soon after the charges were filed, the FBI seized the 1Broker domain.
The official announcement from FBI reads:
“The 1Broker.com domain has been seized by the Federal Bureau of Investigation in accordance with a seizure warrant.”
The FBI has also levied additional charges of wire fraud, money laundering, operating as an unregistered futures commission merchant, and operating as an unregistered broker of securities.
More Companies Under the SEC Scanner
Cryptocurrency security startup Blue Protocol claimed that it has an insider report that 1Broker isn’t “the only exchange that is going to see SEC enforcement shortly.” The startup has refused to name the source though. Blue Protocol is known in the crypto space for its anti-centralized exchange stand. The startup says that exchanges are not ideal platforms to store digital assets due to their vulnerability to external attacks.
https://twitter.com/Blue_Protocol/status/1045482649828057088
Some called the Blue Protocol claims to be “FUD” while others believe that it could be just a start to the industry-wide crackdown by the agency.