The Securities and Exchange Commission (SEC) has charged Brian Sewell, the founder of the American Bitcoin Academy, and his firm Rockwell Capital Management with fraud, alleging that Sewell targeted students to invest in a non-existent crypto hedge fund. The SEC claims that Sewell falsely promoted the fund, promising returns through artificial intelligence (AI) and crypto-related trading strategies, while never launching the fund.
According to the SEC, Sewell received approximately $1.2 million from 15 students, holding the funds in bitcoin. However, the agency revealed that these funds were later lost when Sewell’s digital wallet was hacked. The SEC Director of Enforcement, Gurbir S. Grewal, emphasized the SEC’s commitment to holding accountable those who use attention-grabbing technologies to defraud investors, whether it’s AI, crypto, or other buzzwords.
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 highlighted misrepresentations in a 16-slide investor pitch deck that Sewell emailed to students, including false claims about his educational background and prior experience managing a hedge fund. The case underscores the regulatory scrutiny in the crypto space and the need for investors to exercise caution and due diligence.