’s jurisdiction expansion that would affect the industry
On September 27, filed an injunction against 1Broker.com, a company incorporated in the Marshall Islands better known as 1Pool and the court granted the injunction. 1Broker can no longer operate. According to ’s allegation, 1Pool’s did not comply with securities swap related federal securities regulations when it gathered the US investors. 1Broker was the online platform that allowed foreign currencies, stocks, and options exchanges with . 1Broker violated many regulations such as not registering Broker-Dealer, Know-Your-Customer (“KYC”), and Anti-money laundering (“AML”) compliance with .
The significance of this prosecution is in the expansion of the U.S. jurisdiction. Though this company was incorporated in the Marshall Islands in 2012, seized all the company’s asset with the help of FBI. was able to prosecute a foreign company because one of the investors of this company is U.S. citizen. 1Broker had tried hard to avoid U.S. jurisdiction. The company was incorporated in the Marshall Islands, and the term of use explicitly indicated that the use of 1Broker service was restricted to those whose use was illegal in his/her country.
Can the company still be under the U.S. jurisdiction when the website explicitly forbid U.S. citizen from using its service? Recent prosecution by the implies that it still is. According to the public statement by the , one of the members of FBI’s special investigation team tried logging into the website. Without reading the term of use, he was able to complete the transaction easily. No one in 1Broker either knew about the violation or actively enforced the term.
The implication of this prosecution is groundbreaking: could now reach out to the foreign company with U.S. investors.
Published at Mon, 29 Apr 2019 03:42:41 +0000
