The Securities and Exchange Commission (SEC) has brought charges against Brian Sewell, the founder of the American Bitcoin Academy, and his firm Rockwell Capital Management, alleging fraud in connection with a crypto hedge fund scheme. The SEC claims that Sewell targeted his students, urging them to invest in a hedge fund that he asserted would leverage artificial intelligence (AI) for generating returns.
According to reports, the SEC’s statement on Friday, Sewell, who had safeguarded investors’ money in bitcoin, suffered losses when his digital wallet was compromised in a hacking incident. The agency alleges that Sewell received approximately $1.2 million from 15 students but never launched the promised Rockwell Fund.
Gurbir S. Grewal, director of the SEC’s Division of Enforcement, stated, “Whether it’s AI, crypto, DeFi, or some other buzzword, the SEC will continue to hold accountable those who claim to use attention-grabbing technologies to attract and defraud investors.”
As part of the settlement, Rockwell Capital Management will pay $1.6 million, and Sewell will pay $223,229 without admitting or denying the charges.
The SEC revealed that Sewell sent students a 16-slide investor pitch deck containing numerous misrepresentations and omissions about the fund. The pitch deck falsely claimed Sewell had earned degrees in data science from John Hopkins University and Stanford University. Additionally, he misrepresented having prior experience managing a crypto hedge fund, alleging he turned $250,000 into $9 million, which the SEC asserts was entirely false.
The charges emphasize the need for transparency and accountability in the crypto space, cautioning against investment schemes driven by misleading claims and false representations.