The U.S. Securities and Exchange Commission has announced charges against California resident James Roland Jones in the first-ever enforcement action from the commission to target securities fraud on the darknet.

According to the March 18 complaint, Jones is accused of accessing a darknet-based insider trading forum in late 2016 to seek material non-public information, or MNPI, on which to trade securities.

He was unsuccessful in obtaining any useful MNPI from the forum, but in the spring of 2017, Jones allegedly began selling insider stock tips himself under the false pretext he was privy to MNPI obtained both from the forum and corporate sources he claimed to be personally affiliated with. Jones is believed to have received roughly $27,000 worth of BTC for the fraudulent tips.

Jones’ tips were believed to be general predictions as to whether a stock would go up or down, with Jones sometimes selling tips for the same stock to go in both directions to different customers. When tips failed, Jones would offer another tip for free in exchange for positive reviews on a darknet marketplace.

The alleged fraudster also began operating a collective investment pool in 2017, laiming to make trades on behalf of investors. However, Jones was not trading with investors’ funds, and would instead return a small amount of the principal invested as purported profits to lure his victims into depositing additional funds.

The SEC accuses Jones of having acted in violation of anti-fraud provisions of the Exchange Act, and is seeking disgorgement of ill-gotten gains plus interest, civil penalties, and permanent injunctive relief.

David Peavler, the director of the SEC’s Fort Worth regional office, noted that the agency has committed significant resources to investigate crime on the dark web, stating:

“This case shows that the SEC can and will pursue securities law violators wherever they operate, even on the dark web. We have committed staff and technology to pierce the cloak of anonymity these wrongdoers try to throw over their crimes.”