According to the SEC, Sewell raised funds from his students between 2018 and 2019, claiming that he would use artificial intelligence and machine learning to generate substantial profits through a cryptocurrency hedge fund. However, he never launched the fund and simply pocketed the money.
“The complaints allege that Sewell, who lived in Harrican, Utah, received approximately $1.2 million but did not launch the fund or use the funds for trading strategies he advertised to investors. He subsequently moved to Puerto Rico,” the SEC statement revealed.
Sewell allegedly invested some of the funds in Bitcoin, but his wallet was eventually hacked, resulting in the loss of all the money. As a result, investors were left with nothing.
A settlement agreement between Sewell and the defrauded investors is currently under consideration. If approved by the court, Sewell will be required to repay the investors their initial investment of $1.2 million, along with an additional $402,000 in interest and $223,229 in civil penalties.
This incident follows recent fraud charges against the founder of the HyperFund crypto scheme by US prosecutors.