Operator of bitcoin stock exchange penalized by U.S. SEC

Mon Dec 8, 2014 4:47pm EST
 
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WASHINGTON (Reuters) - The operator of a stock exchange that allowed clients to use bitcoins to trade in certain securities was ordered by U.S. regulators to pay $68,000 to resolve claims that he did not register the exchanges.

During 2012 and 2013, Ethan Burnside and his company, BTC Trading Corp, operated two online exchanges through which account holders could buy, sell and trade securities of companies in the virtual currency business, the Securities and Exchange Commission said on Monday in announcing the settlement.

Burnside and BTC neither admitted nor denied the charges.

Burnside agreed to be barred from the securities industry but would be able to reapply after two years. His lawyer, Steve Unger, said in a statement that they were pleased the SEC had approved the settlement, and that Burnside worked to protect website users and to cooperate with the SEC.

The exchanges had solicited more than 10,000 users who opened online accounts and executed more than 425,000 trader, the SEC said.

The settlement requires Burnside to pay $58,387 in profits and interest, and a penalty of $10,000.

(Reporting by Aruna Viswanatha; Editing by Bernadette Baum)

 
A general exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington, June 24, 2011.   REUTERS/Jonathan Ernst