"Hey, you have to be careful, you can't trust the teacher too much, you know."
A cryptocurrency trading course instructor is facing charges from the United States (US) securities regulator after he misled 15 students into investing a combined $1.2 million in a hedge fund that promised lucrative returns.
Explained further, Rockwell Capital Management founder Brian Sewell allegedly encouraged investors to put funds into non-existent hedge funds from early 2018 to mid-2019.
There is no denying that Sewell uses AI and machine learning technology to maximize investor returns, but he who put his student funds in Bitcoin (BTC) in his crypto wallet was hacked to the point of losing their entire investment.
Following that, the Securities and Exchange Commission (SEC) issued a broader warning to fraudsters in the crypto market where they intend to take action against those who exploit the industry's hype.
Whether it's AI, crypto, DeFi or others, the SEC will continue to hold accountable those who claim to use technology to attract and defraud many investors, the SEC further commented.
Therefore, Rockwell Capital Management agreed to return $1.2 million to investors along with a prejudgment of $402,000 and if the court approves the settlement, Swell himself will pay a civil penalty of $223,229.
This comes after the Commodity and Futures Trading Commission (CFTC) warned crypto investors looking for significant returns in 2024 to avoid being lured by various exaggerated promises by AI trading bots.
The CFTC revealed promising results where most fraudsters use bots, trade signal algorithms, digital asset arbitrage algorithms including other AI assisted technologies.
