Bitcoin-funded securities dealer 1pool and CEO Patrick Brunner fined $990,000

SFC fines

The Commodity Futures Trading Commission (CFTC) announced that a federal court has resolved its action against the company 1pool Ltd. and its owner, by entering a Consent Order.

1pool Ltd. and its CEO and owner, Patrick Brunner, have been charged with illegally offering retail commodity transactions that were margined in bitcoin, failing to register as a futures commission merchant (FCM), and failing to meet its supervisory duties by not having the required anti-money laundering procedures in place.

SEC has already filed charges against the company back in September 2018, citing that 1pool Ltd. a/k/a 1Broker, registered in the Republic of the Marshall Islands, and its CEO Patrick Brunner solicited investors from the United States and around the world to buy and sell security-based swaps. Back then, the SEC alleged that Brunner and 1Broker failed to transact its security-based swaps on a registered national exchange, and failed to properly register as a security-based swaps dealer.

The Order imposes a civil monetary penalty of $175,000 and requires the disgorgement of $246,000 of gains. The company also has to pay to all known U.S. customers approximately 93 bitcoins, valued at approximately $570,000. In total, the defendants are paying a total of $990,000 in resolution of the CFTC action.

James McDonald, CFTC Director of Enforcement, stated:

Intermediaries should take notice that they will be held accountable by the CFTC for failing to comply with registration requirements and failing to implement policies and procedures that are crucial in protecting U.S. customers and our markets. Through the Division’s Bank Secrecy Task Force, Enforcement will continue to investigate and prosecute such violations.

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