The Securities and Exchange Commission (SEC) recently filed fraud charges against Brian Sewell, founder of the American Bitcoin Academy online cryptocurrency course, for scamming his own students out of $1.2 million.
Sewell urged students to invest in his planned Rockwell Fund crypto hedge fund, claiming it would leverage artificial intelligence and advanced trading strategies to generate exceptional returns.
However, Sewell never actually launched the fund, instead pocketing students’ money in Bitcoin which later was hacked and stolen.
TLDR
- Brian Sewell ran an online crypto course called the Bitcoin Academy and urged students to invest in his planned Rockwell Fund crypto hedge fund
- Sewell claimed the fund would use AI and machine learning for trading, but he never actually launched it
- 15 students invested a total of $1.2 million in Sewell’s nonexistent fund
- Instead of launching the fund, Sewell just held the money in Bitcoin, which was later stolen when his wallet was hacked
- The SEC filed fraud charges against Sewell, who agreed to settle and pay back the $1.2 million plus interest without admitting wrongdoing
From early 2018 to mid-2019, Sewell aggressively promoted the Rockwell Fund to over 500 students enrolled in his Bitcoin Academy training program. He touted the fund’s use of AI, machine learning, and algorithmic trading techniques to trade cryptocurrencies. Drawn in by promises of cutting-edge technology and Sewell’s apparent expertise, 15 students invested a total of $1.2 million in the fund.
However, the SEC alleges Sewell never had any intention of launching the Rockwell Fund with investors’ capital. The promised artificial intelligence systems and trading algorithms did not actually exist. Rather than deploying investors’ capital in trades, he simply held it in Bitcoin inside a personal digital wallet.
Tragically for the defrauded investors, Sewell’s Bitcoin stash was later stolen when his wallet was hacked by thieves in 2020. With the funds gone, students had no way to recoup their investments or even determine what Sewell had done with their money. The SEC charges that Sewell essentially used his students’ trust in him to get away with outright fraud.
In their complaint, the SEC accused Sewell of violating antifraud provisions of federal securities laws. Sewell settled the charges without admitting guilt, agreeing to return the full $1.2 million lost by students plus over $400,000 in interest and penalties. The settlement is pending court approval.
The SEC warned the public about schemes like Sewell’s which exploit new technologies like crypto, artificial intelligence, and machine learning to commit fraud. “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,” said SEC Director of Enforcement Gurbir S. Grewal.
This case highlights why extra caution is warranted when investing in new domains like crypto. It also underscores that ethics transcend any one industry or tool like blockchain. Savvy investors should verify fund management practices, evaluate risk management frameworks, and read the fine print regardless of who is pitching the investment vehicle.
