Marshal-Island Bitcoin (BTC) Securities Dealer Ipool Ltd in Trouble as SEC and FBI File Charges

A Marshalls Island securities dealer is the latest to find itself at crossroads with the Securities and Exchange Commission. The watchdog has filed charges against 1pool Ltd (1Broker), CEO Patrick Brunner, for violating federal securities laws.

The violation is in relation to securities-based swaps funded by Bitcoins (BTC) offered by the alleged securities broker. The SEC in its filing asserts that the 1pool Ltd conducted business in the U.S in a manner that violated securities law.

The SEC in a summary filling has taken Ipool Ltd to task for illegally offering off-exchange and retail commodity transactions. The agency has also taken issue with the fact that the broker is not in any way registered with the Plaintiff Commodity Futures Trading Commission. Failure to implement adequate anti-money laundering and related supervisory procedures are other issues raised by the SEC.

Ipool Ltd officials will also have to explain why they operated a brokerage firm without first registering as futures commission merchants.  The watchdog also accuses the defendants of soliciting and accepting orders from non-ECPs for retail commodity transactions. The defendants will also have to defend themselves for receiving money, securities in the form of Bitcoin.

The agency on its filing with the U.S District Court for the District of Columbia is seeking permanent injunctions. In addition, it is pursuing disgorgement plus interest as well as penalties.

“In addition, the Commission seeks civil monetary penalties and ancillary remedial relief, including but not limited to, trading and registration bans, disgorgement, restitution, rescission, pre-judgment, and post-judgment interest, and such other relief as the Court may deem necessary and appropriate,” SEC in a court filing

According to the SEC, unless the defendants are restrained, they will continue violating Section 4(a) and 4dc of the Commodity Exchange Act.  The SEC is not the only agency to have raised concerns about 1Broker operations.

The Federal Bureau of Investigations has already seized the firm’s 1Broker.com domain. The agency accuses the firm of violating anti-money laundering policies as well as engaging in acts of wire fraud.  The FBI just like the SEC has also taken issue with the firm for operating without a valid license as a securities broker/dealer.

FBI on taking down the firm’s domain said it averted its usage to commit or facilitate criminal violations. The agency is currently running an open desk where people who might have interacted with the firm can file their complaints.