Fantasy Bitcoin Stock Market Sand Hill Fined $20K By SEC

The US Securities and Exchange Commission (SEC) has settled with Sand Hill Exchange, an experimental stock market that used bitcoin.

Sand Hill, a Boost VC graduate that began operating late last year, agreed to pay a $20,000 settlement for alleged violations of US securities law, according to an SEC release. The founders of the site, it claims, did not admit to deny the allegations but agreed to the SEC's cease and desist order.

Sand Hill had pitched itself as an experiment, allowing investors to purchase synthetic shares in unlisted Silicon Valley companies, akin to a fantasy sports version of the stock market.

The agency said in its settlement announcement:

"An SEC investigation found that Silicon Valley-based Sand Hill Exchange was offering and selling security-based swaps contracts to retail investors outside the regulatory framework of a national securities exchange and without the required registration statements in effect."

News that the site was under investigation surfaced earlier this month, when Sand Hill published a now-redacted blog post that outlined how the site had faced inquiries from the federal agency in April.

According to its main page, all money deposited by users has since been refunded. Sand Hill did not immediately respond to a request for comment.

SEC official Reid Muoio said in a statement that "we were able to act quickly before any losses materialized in this offering that occurred outside the proper regulatory framework."

Image credit: Colored ticker board via Shutterstock

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