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Online Crypto Lending Company Sued for Fraud, US Regulator Reports

Online Crypto Lending Company Sued for Fraud, US Regulator Reports
  • SEC sued an online crypto lending platform for fraud.
  • The platform allegedly swindled $2 billion from investors.
  • SEC claims this money came from a false and unregistered “Lending Program”.

Just today, the US SEC sued the online crypto lending platform, BitConnect, for allegedly swindling a total of $2 billion. Its founder, Satish Kumbhani, its top US promoter, Glenn Arcaro, and affiliated company are sentenced for this crime.

In the press release issued by US SEC (Securities and Exchange Commission), BitConnect falsely represented a “Lending Program”. Apparently, this program raised over $2 billion in investments. SEC stated that Kumbhani et. al. offered

a fraudulent and unregistered offering and sale of securities in the form of investments in a ‘Lending Program,’

In addition, Kumbhani and the other offenders even claimed that the company’s “proprietary ‘volatility software trading bot’” would gradually “generate exorbitantly high returns” to the investors.

However, SEC charged and filed the case to BitConnect and Kumbhani, anyway. The charge states that the accused stole the investors’ funds and transferred them to their digital wallet addresses. In addition, SEC also claims that Arcaro established the company, “Future Money”, only to “lure investors.”  

More so, Lara Shalov Mehraban, the Associate Regional Director of SEC’s New York Office stated that,

“We allege that these defendants stole billions of dollars from retail investors around the world by exploiting their interest in digital assets”

In conclusion, the defendants could face “injunctive relief, disgorgement plus interest, and civil penalties.” In fact, according to the US Justice Department, Arcaro already pleaded guilty to his criminal charges last Wednesday.

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Cho Amisola is a passionate writer for both creative writing and digital publishing. She’s been featured and published in both areas and is now focusing on blockchain news.