As noted in a U.S. Department of Justice and Securities and Exchange Commission (SEC) filing, the case is the first in which the commission has taken action against securities violations carried out on the dark web.
Under the username “MillionaireMike,” Jones bought and sold personally identifiable information on the dark web, including names, addresses, dates of birth, and social security numbers, between 2016 and 2017, the DOJ said.
The DOJ alleged the 33-year-old used this information to open up fake accounts to conduct trades on material, non-public information (MNPI), data on a company that has not been made public but could impact its share price if shared.
James Roland Jones of Redondo Beach, California, faces a maximum penalty of five years in federal prison. A sentencing date has not yet been confirmed.
According to the report, Jones also devised a scheme to sell false insider tips on the dark web. Several users paid Jones in bitcoin and traded based on the information Jones provided.