Man Who Issued Securities For Bitcoins Settles With SEC 56
MrBingoBoingo writes with news that the U.S. Securities and Exchange Commission has settled federal civil charges with Erik Voorhees, a man who sold shares of two businesses in exchange for Bitcoins without registering them. Voorhees must make restitution for the $15,000 in profit he made, plus interest, and a $35,000 fine. Here's the SEC's filing (PDF). "The agreement reflects an expanded effort by U.S. regulators to cast a wider net over the burgeoning bitcoin economy. It comes as investor enthusiasm grows for direct offerings of shares by new bitcoin-focused ventures over bitcoin's global computer network. Maidsafe, a system for sharing computer memory, raised $7 million last month in such a deal."
The what strikes where now? (Score:5, Informative)
The dude broke the law. A very real, very good (shockingly) law.
Doesn't matter if he offered securities for bitcoin, bushels of corn, or steamy massages. The currency isn't the problem with what he did.
Routine unregistered securities case (Score:5, Informative)
That's a routine sale of unregistered securities case. If he'd sold them for dollars or yen, the SEC would have done the same thing. Bitcoin is irrelevant here.
Re:Routine unregistered securities case (Score:5, Informative)
Re:SEC (Score:5, Informative)
Because the SEC's job isn't to stop stupid. Its job is to stop fraud. Distinguishing the two can be tricky. Selling unregistered securities is one area that has been designated at fraudulent. Selling over overpriced or excessively risky investments has not been designated fraud as long as the buyer isn't knowingly fed false information.
Re:Ironic (Score:4, Informative)
Why? He's doing business from Panama. US regulators can FOAD if they think they have the right to regulate the planet. If some US investors bought these securities, then that shoud be between them and the SEC. Not Vorhees.
That's nice, dear.
"Voorhees, age 29, is a U.S. citizen who, at the time of the FeedZeBirds and SatoshiDICE offerings, was living in the United States."
[...]
"As a result of the conduct described above, Voorhees violated Sectons 5(a) and 5(c) of the Securities Act, which prohibit the direct or indirect sale of securities, offer to sell or offer to buy securities through the mails or interstate commerce unless a registration statement has been filed or is in effect. "
So a US citizen, living in the US, sells securities to US investors in violation of US law, but he should walk because he used a .PA email address to do it?
Okay, that makes sense. It's not very much different from how a US citizen is able to make a phone call to Romania to hire a hit man. That's totally legal because part of the call takes place in another country, right?