Bitcoin entrepreneur settles SEC charges over stock sales




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BY JONATHAN STEMPEL

A well-known proponent the electronic currency bitcoin agreed nearly $51,000 settle . Securities and Exchange Commission civil charges that he publicly offered unregistered shares two Internet ventures, the regulator said on Tuesday.

Erik Voorhees, 29, published prospectuses and solicited investors through the Bitcoin Forum website buy shares FeedZeBirds and SatoshiDICE, both which he co-owned, without first registering the offerings as required under federal securities law, according the SEC.

The settlement calls for Voorhees to give up $15,844 profit and interest, and a $35,000 fine. He did admit or deny wrongdoing.

Voorhees is also a founder Coinapult, which lets users transfer bitcoin via email or messaging service. The virtual currency is transacted independent central control, and is backed by any government or central bank.

“All issuers selling securities to the public comply the provisions of the securities laws, including issuers seek to raise using bitcoin,” said Andrew Ceresney, head of the SEC enforcement division.

Brian Klein, a lawyer for Voorhees, did immediately respond to requests for comment. Klein has also worked for the nonprofit Bitcoin Foundation, which advocates of the currency.

The SEC said Voorhees helped raise 2,600 bitcoins in May 2012 through the sale of 30,000 shares in FeedZeBirds, which promises to bitcoins to users forward sponsored text messages.

also accused Voorhees of helping raise 50,600 bitcoins from August 2012 to February 2013 through the sale of 13 million shares of SatoshiDICE, a gaming website that pays out casino-like winnings in bitcoin.

SatoshiDICE was sold last July for more than $11 million, Voorhees said at the time.

According to the SEC, the value of bitcoin has fluctuated since Voorhees’ first unregistered offering from about $5 to $1,200 per bitcoin. (Reuters)