SEC Files Lawsuit Against BitConnect Founder Over Role in $2B Cryptofraud

BitConnect founder, who was involved in the $2.5 billion scam that swindled cryptocurrency…

Grow Your Business,
This is not your inbox

Keep up to date and sign up for our daily newsletter!

Read for 3 minutes

This story originally appeared on be[IN]crypto

BitConnect founder, who was involved in the $2.5 billion scam that shocked crypto-worlds, has been sued by the U.S. Securities and Exchange Commission.

According to a press release issued by the agency, the United States Securities and Exchange Commission (SEC) has filed a civil lawsuit against BitConnect founder Satish Kumbhani. BitConnect was described by the regulatory agency as a “global fraudulent and unregistered offer of investments in a program involving virtual assets.”

Khumbhani, the U.S. top promoter for the company that eventually saw investors withdraw $2 billion of their funds, was a key player. These men offered to invest in a BitConnect program, which they claimed would yield high returns.

In the press release, the SEC alleges that Khumbhani and others siphoned investors’ funds to digital wallets for their own benefit. They also stated that BitConnect had a vast network of global promoters, indicating that it was an organized effort.

Lara Shalov Mehraban is Associate Regional Director for SEC’s New York Regional Office.

We allege that the defendants took billions from global retail investors by exploiting their interests in digital assets. We will pursue those involved in digital asset fraud and bring them to justice.

The SEC aims to recover funds and compose finds. The location of Khumbhani is still unknown.

BitConnect’s story is a lesson

Many investors now are wary about scams such as BitConnect’s outrageously high returns. However, many of those who were involved in the 2017 mania weren’t well-informed. Every bull cycle sees the cryptocurrency market attract more investors. This invariably leads to some financial damage.

BitConnect is one of the most memorable and popular cryptocurrencies market scams. It was the best-known crypto Ponzi scheme. Investors have become more skeptical about cryptocurrency claims and projects since then.

The market was heavily influenced by the incident, encouraging due diligence, though that has not stopped cryptocurrency scams from continuing to occur. The Africrypt scam that saw $3.6 billion stolen has both regulators and investors fuming.

This is why regulators are accelerating their investigation of crypto markets. Investor protection is a top priority for regulators. Fraud, no doubt, is at the top of the list. The market is still in its infant stage, so regulation will be necessary to curb untoward activities.

This story was seen first on BeInCrypto

Publiated at Thu, 02/09/2021 07:53.16 +0000

Leave a Reply

Your email address will not be published. Required fields are marked *