Skip to main content

SEC Files Fraud Suit Against Bitcoin Startup Owner

The US Securities and Exchange Commission has filed fraud charges against a UK citizen accused of bilking the investors of a bitcoin startup.
According to court documents filed today, the SEC accused Renwick Haddow of misleading stakeholders who bought into two companies he founded: Bitcoin Shop Inc., which was advertised as a platform for trading bitcoin, and Bar Works, a co-working space company akin to WeWork. Concurrently, the US Attorney's Office for the Southern District of New York is also pressing charges against Haddow.
The SEC alleged that Haddow, who resides in New York, misrepresented key factors about the company's operation and the background of senior executives of Bitcoin Store Inc. who, according to the statement, "do not appear to exist" in an attempt to to allure potential investors.
Haddow – who the SEC said created a broker-dealer firm, called InCrowd Equity, without registering with the agency – was further accused of diverting funds raised from investors to bank accounts held outside of the country.
The SEC said today in a release:
"Haddow allegedly diverted more than 80 percent of the in funds raised by the broker-dealer for the Bitcoin Store, and sent more than $4 million from the Bar Works bank accounts to one or more accounts in Mauritius and $1 million to one or more accounts in Morocco."
In court documents, the SEC noted that Haddow had previously received an eight-year disqualification in the UK from working as the director of a company, a ban stemming from his involvement with a firm called Branded Leisure plc.
The SEC also alleged that fake identities were employed by the accused firms. The court documents noted that the CEO of the startup is named Gordon Phillips, who appeared in promotional videos for the service. According to a LinkedIn page, the profiled person used to work for HSBC in London and Hong Kong, as well as Deutsche Bank.
Yet the agency alleged that Gordon Phillips "never worked for HSBC or Deutsche Bank" and it believes the name is a fictitious one.
Earlier this month, New York business publication Crain's reported on the collapse of Bar Works, noting that the firm is the subject of an investigation by the Federal Bureau of Investigation as well as two investor-led lawsuits. A report in January, from The Real Deal, first suggested that fake identities were employed.
The website www.bitcoinstore.global appears to be connected to the scheme. A press release published on the site in July 2015 showed that Bitcoin Store Inc., the exact name of the entity charged by the SEC, was trying to issue a convertible promissory notes with a coupon of 8% per annum in order to raise $1.825 million.

Comments

Post a Comment

Popular posts from this blog

Duncan Logan just tweeted that he's on board Electroneum

I have been a buyer and holder of bitcoin and Etherreum for a long time but this will be the first ICO I buy into--Duncan Logan.

What is Electroneum?

Electroneum (ETN) is a cryptocurrency that can be mined with a smartphone, requiring almost no technical knowledge or prior experience. This sets it apart from other cryptocurrencies (like Bitcoin) which require expensive hardware and technical know-how to mine.
Electroneum’s unique mobile mining experience allows anyone with a smartphone to earn ETN coins by letting the miner app run in the background.
It was designed specifically with mobile users in mind, thereby appealing to a potential market of 2.2 billion smartphone users around the world. Unlike other cryptocurrencies, Electroneum has a user-friendly, beginner-oriented interface that allows users to seamlessly transfer ETN coins between one another, check their balances, and mine coins.
Being a cryptocurrency, Electroneum is created, held, and spent electronically, and has no phy…
Post a Comment
Read more

Is Bitcoin Legal?

Bitcoin is of interest to law enforcement agencies, tax authorities, and legal regulators, all of which are trying to understand how the cryptocurrency fits into existing frameworks. The legality of your bitcoin activities will depend on who you are, where you live, and what you are doing with it. Bitcoin has proven to be a contentious issue for regulators and law enforcers, both of which have targeted the digital currency in an attempt to control its use. We are still early on in the game, and many legal authorities are still struggling to understand the cryptocurrency, let alone make laws around it. Amid all this uncertainty, one question stands out: is bitcoin legal? The answer is, yes, depending on what you’re doing with it. Read on for our guide to the complex legal landscape surrounding bitcoin. Most of the discussion concerns the US, where many of the legal dramas are currently playing out. Alternatively, you can access our comprehensive Regulation Report for worldwide expert …
Post a Comment
Read more

Suddenly, Bitcoin to Be Officially Legal in India

Leading Bitcoin exchange Zebpay has revealed that the Indian government committee has ruled in favor of regulating Bitcoin. On April 14, Cointelegraph reported that the Inter-Disciplinary Committee within India’s Ministry of Finance was actively investigating the legal status of Bitcoin and considering the possibility of regulating the market. Efforts of Indian Bitcoin exchanges Over the past three years, the big three Indian Bitcoin exchanges including Zebpay, Coinsecureand Unocoin operated with self-regulated trading platforms with strict Know Your Customer (KYC) and anti-money laundering systems in place, despite the lack of regulations in the digital currency industry and market. The efforts of the Bitcoin exchanges in India to self-regulate the market allowed the Indian government to reconsider the Bitcoin and digital currency sectors, regardless of the criticisms by several politicians that significantly lack knowledge in cryptocurrency. On March 24, Cointelegraph reported that…
Post a Comment
Read more