1Broker will be back…here’s why
UPDATE: 1Broker is back in read-only mode on a new domain https://1broker.io
UPDATE: Nearly all of the 1Broker users I have contact with who got their withdrawals done quickly by editing their hosts file as I tweeted about below, have received their funds back from 1Broker.
Looking for an alternative to 1Broker that allows stocks? Check out simplefx.com
So everyone’s favourite CFD market 1Broker had their domain seized by the FBI as revealed in this case docket on Sept. 27th. According to the SEC: “1pool Ltd. a/k/a 1Broker, registered in the Republic of the Marshall Islands, and its CEO Patrick Brunner solicited investors from the United States and around the world to buy and sell security-based swaps.”
If you read the case details near the bottom under RELIEF REQUESTED you can see the SEC attorney is demanding all profits from 1Broker since they opened and they also mention a civil penalty (fine). Why can’t we have nice things?
1Broker was a CFD market where traders can buy/sell stocks, commodities, indices, and forex instruments. And we loved it! Sadly securities or stocks are not legal to trade in the US without being registered by the SEC, and subsequently they got their .com domain seized for essentially not being moreaggressive to block US customers. In fact as the case details reveal, they used an undercover agent to violate the ToS at 1Broker and make some trades in order to build the case against them. This was done way back in 2016 long before the crypto bull run of 2017.
1Broker was really growing in the last few months so it looks like the SEC waited until 1Broker had built up some decent volume before dropping the hammer.
It’s important to point out that CFDs are perfectly legal in much of the world outside of the USA. Having a contract pinned to a US security gets a bit murky but I suspect even these would be legal in many countries. We all knew 1Broker was a bucket shop, but it was good at what it did, legal in much of the world, and very good with its customers. Because there was no USD involved (only bitcoin), it was operated by an Austrian, and it had no servers nor infrastructure in the US - makes me suspect we haven’t seen the last of 1Broker. The domain seizure itself really only highlights how important it is for everyone to stop using Verisign registered domains like .com / net / org / biz, etc.
If it’s a .com it can be seized
There is a convoluted web of bureaucracy from the early days of the internet around popular top level domain names involving Network Solutions, which was acquired by VeriSign in 2000. That cemented control of the all important .com and .net domains with a single US company, VeriSign, literally putting complete control over a huge portion of the internet within reach of American courts regardless of where the owners are located, possibly forever. Fuck that, am I right? The solution of course is to use a tld that is less likely to comply with US laws, or not at all. This might be either a country level tld like .cc or even better Namecoin. Namecoin is an experimental open-source technology which provided true decentralization by hosting a DNS on the blockchain. These domains cannot be seized as far as I know.
1Broker or someone like them will fill the vacuum
First of all, nearly all of the 1Broker traders I have contact with (dozens) who got their withdrawals in on time, have received their funds back from 1Broker. According to this email I got back from Patrick Brunner asking for a comment, this withdrawal window may have now closed.
In the SEC allegations they mention the sole developer and owner of 1Broker as Mr. Patrick Brunner who resides in Austria. Austria has really strict extradition laws for its citizens so I think there won’t be any risk of Mr. Brunner facing a US court. My guess and hope is that 1Broker acquires a new domain name and continues business as usual. I guess we’ll see. If they do decide to return, I will have no problem trusting them with another deposit.
That said, if 1Broker doesn’t return I suspect someone out there is already working on the DApp for this. Godspeed to them.
Looking for an alternative to 1Broker that allows stocks? Check out simplefx.com
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