In Re Erik T. Voorhees (settlement): Not Really a Bitcoin Case

The hot bitcoin-related story involves the settlement between the Securities and Exchange Commission (SEC) and bitcoin-advocate, Erik T. Voorhees.

This case involves bitcoin but is not about bitcoin.  Stated differently, this case is not an attack on bitcoin.  It simply involves charges of a crime unrelated to the virtual currency itself.

Specifically, Voorhees was charged with offering securities (stock) in two different companies which were not registered with the SEC.  There were other associated alleged violations (e.g., not filing a prospectus).

Bitcoin is involved, but is not the focus of this case, only because Voorhees is a bitcoin-advocate, the stocks were sold in bitcoin, and the two businesses used bitcoin.

There is nothing in the order/settlement which criticizes or criminalizes bitcoin.

The settlement means that Voorhees disgorges $15,000 (plus interest) and pays a $35,000 civil penalty.  Stories (such as this one) that he is paying a $50,000 “fine” are not defining the terms correctly.

The settlement / order instituting cease and desist proceedings is here.

The SEC’s press release is here.  Their prior May 7, 2014 “Investor Alert: Bitcoin and other Virtual Currency-Related Investments” is here.

Voorhees’ post on Reddit about the settlement is here.

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