Under the Court Orders, Bitcoin Store should pay more than $1.6 million, whereas the Bar Works entities should pay more than $81 million in penalties.
The United States Securities and Exchange Commission (SEC) has secured an important victory against Bitcoin fraud. On January 18, 2018, Judge Lorna G. Schofield of the New York Southern District Court signed a number of orders granting SEC’s applications for final default judgements against three entities run by Bitcoin scammer Renwick Haddow.
- The final judgement as to defendant Bar Works 7th Avenue, Inc says the company should pay $39,506,812.67 to the Securities and Exchange Commission.
- The final judgement as to defendant Bar Works, Inc says the company should pay $42,222,871.67 to the Securities and Exchange Commission.
- The final judgement as to defendant Bitcoin Store, Inc says the company should pay $1,623,179.95 to the Securities and Exchange Commission. The penalty for Bitcoin Store consists of disgorgement, interest and a civil monetary penalty of $1.55 million. The latter is calculated by multiplying the lower maximum statutory third-tier penalty applicable to the earlier period when Bitcoin Store’s violations occurred – $775,000 – by Bitcoin Store’s two violations: misrepresentations in its differing March 2015 and May 2015 private placement memoranda.
In addition to the monetary penalties, the defendants are also permanently restrained and enjoined from violating US securities laws.
In June last 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.
In mid-December 2017, the SEC informed the Court that the United States government is in the process of extraditing Haddow and that the United States Attorney’s Office for the Southern District of New York recently learned that Haddow has consented to extradition.