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

The SEC has settled with Sand Hill Exchange, an experimental stock market that used bitcoin as a medium of exchange.

AccessTimeIconJun 17, 2015 at 5:51 p.m. UTC
Updated Sep 11, 2021 at 11:43 a.m. UTC
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

UPDATE (17th June 20:00 BST): This report has been updated with a response to the SEC settlement from Sand Hill creator Gerrit Hall.

CoinDesk - Unknown

sand hill

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

, 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, the statement claims, did not admit to or 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.

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."

Sand Hill responds

In a video statement posted to the company's blog, Sand Hill creator Gerrit Hall responded to the SEC settlement, remarking that "I personally accept all responsibility for any and all wrongdoing throughout the entirety of Sand Hill Exchange."

He explained that the SEC's involvement was sparked by a decision in March to allow users to pay using bitcoin during a private beta.

Hall explained:

"I believed the 2006 UIGEA provided a carve-out for skill-based competitions with parimutuel outcomes. The SEC found otherwise, determining this constitutes a securities-based swap. We have complied with their cease-and-desist order, terminated our beta and refunded our friends."

Hall added that he intends to continue operating Sand Hill "without any real currency", and called for the creation of flexible financial innovation frameworks, or "sandboxes", echoing statements from others in the digital currency space.

Image credit: Colored ticker board via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.