SEC seeks $1.5 M from Bitcoin Store

SEC specifies the size of civil penalties it seeks from fraudulent entities operated by Renwick Haddow
03 January 2018   1370

In a letter addressed to Hon. Lorna G. Schofield of the New York Southern District Court, the Securities and Exchange Commission (SEC) says it seeks civil penalties of $4,526,765 from Ponzi scheme Bar Works, Inc. and $1,810,706 from Bar Works 7th Avenue, Inc., whereas the penalty sought from Bitcoin Store is $1,550,000.

In June this year, the United States Securities and Exchange Commission (SEC) filed fraud charges against Renwick Haddow, a UK citizen living in New York. The SEC alleged that he created a broker-dealer and did not register the firm with the SEC as required under 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.

Haddow allegedly diverted more than 80% 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.

Israeli BTC Investors to Face Catch 22

They need to pay taxes from Bitcoin investing in order to avoid their property arrest, but banks don't take their money due to AML issues
06 August 2019   129

Bitcoin investors in Israel are faced with the impossibility of paying taxes, as local banks refuse to accept funds received from the sale of cryptocurrencies because of the risks of money laundering and terrorist financing. About this writes the local edition of Haaretz on August 6.

Bitcoin is not recognized as a currency in Israel, therefore, individuals must pay 25% of the income from cryptocurrency trading to the treasury, and legal entities - 47%.

Investor Ron Gross told the publication that he acquired bitcoins in 2011 and reported his income to the tax office. In 2017, the bank that served Gross began to refuse to accept funds received from the sale of bitcoins. The investor met with representatives of the bank to demonstrate to them a 70-page history of bitcoin transactions as confirmation of the origin of the funds, but failed to convince them.

The tax authority is aware of the problem, but they say the ball isn’t in their courts. I’ve tried working with almost all the banks, but the minute they hear the word ‘Bitcoin’ they freeze up.
 

Ron Gross

Bitcoin investor from Israel

 

Since Gross was unable to pay taxes on time, his bank account, home, and even scooters were arrested. According to the investor, the tax authorities know about the problem, but can do nothing.

According to Haaretz, the tax office is aware of $ 86 million in unpaid taxes on income from cryptocurrency trading. It is possible that the real amount may be significantly higher.

Roy Arav, another Bitcoin investor, kept the proceeds from trading Bitcoin in an account with Israeli bank Discount under the control of the Bit2C exchange. The bank refuses to transfer money to Arava’s personal account under the pretext that its politicians forbid it to transfer funds related to virtual assets to client accounts due to the risks of money laundering and terrorist financing.

Arav also could not pay taxes and was forced to sue the bank. According to the investor, the authorities entered his position and granted him a deferral of time for the consideration of the claim.