SEC Charges International Dealer That Sold Security-Based Swaps to U.S. Investors

The Securities and Exchange Commission today charged XBT Corp. SARL d/b/a First Global Credit, a Switzerland-based securities dealer, for offering and selling unregistered security-based swaps to U.S. investors using bitcoins and for failing to transact its swaps on a registered national exchange. According to the SEC's order, First Global Credit used a variety of marketing methods to target and solicit U.S. individuals to deposit and use bitcoins to buy and sell a variety of investment products. Although First Global Credit used different terminology to describe the investments it offered, including "bitcoin Asset Linked Notes," investors were able to participate in the price movements of securities, including those listed on U.S. securities exchanges, without owning them. These types of instruments are considered security-based swaps under the U.S. federal securities laws.