The Securities and Exchange Commission (SEC) has announced that it has filed fraud charges against a U.K. citizen for cheating investors in bitcoin related investment schemes.
According to the official announcement, Renwick Haddow is the founder of a purported Bitcoin platform and a chain of co-working spaces located in former bars and restaurants. The SEC stated that Haddow, living in New York, created a broker-dealer without complying with the federal securities laws.
Haddow allegedly used sales representatives to cold call potential investors and sell securities in Bitcoin Store Inc. and Bar Works Inc. In its complaint, the SEC said that offering materials presented to investors in both companies misrepresented a number of key facts. The materials provided to Bitcoin Store investors claimed it was “an easy-to-use and secure way of holding and trading Bitcoin” and had generated several million dollars in gross sales. According to the SEC, Bitcoin Store has never had any operations nor generated the gross sales it touted.
Haddow allegedly diverted over 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.
“As alleged in our complaint, Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability. In reality, Haddow controlled the companies from behind the scenes and they were far from profitable,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
The SEC said that it has obtained an emergency asset freeze against all defendants and relief defendants in the case.
The U.S. Attorney’s Office for the Southern District of New York on Friday also announced criminal charges against Haddow.
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