UPDATE (17th June 20:00 BST): This report has been updated with a response to the SEC settlement from Sand Hill creator Gerrit Hall.
The US Securities and Exchange Commission (SEC) has settled with Sand Hill Exchange, an experimental stock market that used bitcoin.
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:
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
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 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.
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