SEC Indicts BitConnect Founder and Lead US Promoter

The US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission (SEC) has continued its efforts against multi-billion dollar crypto scam BitConnect and brought fraud charges against its Founder, Satish Kumbhani, and its top US promoter, Glenn Arcaro and his affiliate.

This action came after the market regulator settled charges with another three US BitConnect promoters last month for a hefty disgorgement amount and fine.

BitConnect is one of the largest crypto scams that was pulled off during the Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco Read this Term) craze. According to the SEC, the scheme siphoned off $2 billion from retail investors around the world by promising massive returns.

The scheme created a network of promoters around the country to spread the word about the fraudulent scheme. Arcaro was the lead national promoter of BitConnect and lured investors through his website, Future Money. He has already pled guilty to other criminal charges against him.

Traping Investors with False Claims

The regulator filed the latest complaint at the United States District Court in the Southern District of New York and alleged that the defendants sold unregistered securities in a fraudulent offering from early 2017 through to January 2018. In addition, it mentioned BitConnect’s false promise of deploying trading bots to generate profits.

The SEC pointed out that Bitconnect and Kumbhani siphoned the proceeds to the wallets controlled by them and used the funds for their own benefits.

The formal complaint charged all the defendants for violating the antifraud and registration provisions of the federal securities laws. The SEC is now seeking injunctive relief, disgorgement and civil penalties.

Commenting on the case, Lara Shalov Mehraban, Associate Regional Director of SEC's New York Regional Office, said: “We allege that these defendants stole billions of dollars from retail investors around the world by exploiting their interest in digital assets. We will aggressively pursue and hold accountable those who engage in misconduct in the digital asset space.”