Mobile Commerce

SEC’s Bitcoin Crackdown


It seems everyone lately is looking to bring bitcoins into the legally controlled mainstream, and now the SEC is getting in on the act. Yesterday, the Securities and Exchange Commission announced charges against bitcoin marketing site FeedZeBirds and the operator of bitcoin betting site SatoshiDice

According to an SEC release, the operator of both sites, Erik Voorhees, sold millions of shares in both of his bitcoin properties. What he didn’t do was register the securities as required by law.

“All issuers selling securities to the public must comply with the registration provisions of the securities laws, including issuers who seek to raise funds using Bitcoin,” Andrew J. Ceresney, director of the SEC’s Division of Enforcement, said in a statement. “We will continue to focus on enforcing our rules and regulations as they apply to digital currencies.”

As part of a settlement with the SEC, Voorhees will disgorge around $15,000 in profits and pay a fine of $35,000.

Though this is an expensive setback for Voorhees, it ironically does offer bitcoin some legitimacy – the SEC is officially treating the bitcoin bases sales as if they were made with real money. From their statement:

“Investors paid for their shares using Bitcoin, a virtual currency that can be used to purchase real-world goods and services and exchanged for fiat currencies on certain online exchanges.”

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