SEC fines bitcoin stock exchange owner

The Securities and Exchange Commission fined a computer programmer $68,000 on Monday for trading unregistered securities for bitcoins on unregistered stock exchanges. 

Under his company BTC Trading Corp., Ethan Burnside, allowed account holders to buy, sell and trade securities with bitcoins and litecoins through two online businesses – BTC Virtual Stock Exchange and LTC-Global Virtual Stock Exchange – from August 2012 to October 2013, an SEC news release said. But neither of the online companies were registered as a broker-dealers or stock exchanges with the SEC. 

Burnside also illegally allowed investors to use digital currencies to buy and sell shares of LTC-Global, as well as shares of a separate Litecoin mining venture he owned.  

“The registration rules are vitally important investor protection provisions, and no exemption applies simply because an entity is operating on the Internet or using a virtual currency in securities transactions,” SEC’S New York Regional Office Director Andrew Calamari said in the release. 

Approximately 2,655 users opened online accounts with the LTC-Global exchange and executed approximately 60,496 trades through the website, paying a total of 12,081 litecoins.  The BTC exchange had approximately 7,959 online user accounts and 366,490 trades, paying 2,141 bitcoins.