Bitcoin trader sanctioned by SEC 09 December 2014New York Reporter: Stephanie Palmer
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The US Securities Exchange Commission (SEC) has sanctioned a computer programmer for running unregistered online venues that traded in virtual currencies bitcoin and litecoin.
Ethan Burnside and his company, BTC Trading Corp. operated two online companies, BTC Virtual Stock Exchange and LTC-Global Virtual Stock Exchange from August 2012 to October 2013, without registering either as a broker-dealer or stock exchange with the SEC.
Burnside agreed to settle the case by paying a total of more than $68,000 to the SEC, comprised of his profits from the venues plus interest and a $10,000 penalty.
The exchanges allowed account holders to buy, sell and trade business securities that were listed on the site, primarily virtual currency-related entities.
A total of 52 issuers paid BTC Trading Corp. 11,450 litecoins in fees to list their shares with the LTC-Global exchange, and 69 issuers paid 210 bitcoins to list their shares with the BTC exchange.
“Burnside operated two online enterprises that weren’t properly registered to engage in the securities business they were conducting,” said Andrew Calamari, director of the SEC in New York.
“The registration rules are vitally important investor protection provisions, and no exemption applies simply because an entity is operating on the internet or using a virtual currency in securities transactions.”
Burnside has also been banned from the securities industry, with the opportunity to reapply after two years.
The SEC order also found that Burnside was operating separate enterprises, offering shares in LTC-Global itself, and operating a litecoin mining operation.
He also advertised his trading venues on websites dedicated to virtual currency, a practice that also should have been registered with the SEC under federal securities laws.
While Burnside did not accept or deny the findings, he agreed to cease and desist from committing or causing additional violations. The $10,000 penalty reflects his fast remedial action and cooperation with the SEC investigation.
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