SEC alleges trader used BTC to hide fraud profit

The U.S. Securities and Exchange Commission alleges day trader from Philadelphia Joseph Willner in illegal taking over more than 100 brokerage accounts
01 November 2017   599

The U.S. Securities and Exchange Commission (SEC) is suing a day trader from Phildelphia for alleged fraud, claiming he used bitcoin to hide their profits. This is reported by Coindesk.

On 30th of October, the Commission issued a suit against Joseph Willner. He is accused in illegal taking over more than 100 brokerage accounts and using the victims' funds to artificially inflate stock prices that he would then trade against advantageously.

According to SEC, Willner used an unnamed bitcoin exchange to hide the profits from illegal activities and convert funds from $ to BTC. After that, funds were transferred to another unnamed person.

To mask his payments to the other individual as part of a profit-sharing arrangement, Willner allegedly transferred proceeds of profitable trades to a digital currency company that converts U.S. dollars to Bitcoin and then transmitted the bitcoins as payment.

SEC press release

The Commission states that these two people made at least $700k in profit, using the account take-over scheme and investigation is still going.

Account takeovers are an increasingly significant threat to retail investors, and it is exactly the type of fraud our new Cyber Unit is focusing on.

Stephanie Avakian
Co-Director,  SEC’s Division of Enforcement

Arizona to Protect Crypto Nodes Legally

According to the public records, proposed protections for cryptocurrency node operators are moving ahead in Arizona's legislature
21 February 2018   43

On February 6 House Bill 2602 was filed by Representative Jeff Weninger (R.-17). It passed the Arizona House of Representatives on February 20 with 55 out of 60 votes. Now it will be sent to the State Senate.

The bill will prevent governments in the state from imposing restrictions on people who run nodes in their residences.

The bill does not specify whether it is restricted to cryptocurrency miners. However, the bill states that individuals using computing power to either validate or encrypt a transaction on a blockchain are protected.

This is just one out several bills making their way through the Arizona legislature. Another bill by Weninger would formally define the terms "coin", "blockchain," and "initial coin offering" within the state's legal framework.

Another bill recently passed by the Arizona Senate which would empower the state government to accept taxes in bitcoin and other cryptocurrencies.