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SEC Sues 5 Individuals Over $2B BitConnect Ponzi

SEC-Sues-5-Over-$2B-Bitconnect-Ponzi
  • The U.S. SEC files charges to five promoters for their alleged involvement in BitConnect 2018 scheme.
  • The promoters received commissions based on their success in soliciting funds.

On Friday, the U.S. Securities and Exchange Commission sues five individuals for their alleged involvement in the Bitconnect Ponzi. It should be noted, BitConnect is the global crypto lending and exchange platform that collapsed in 2018.

Based on SEC’s complaint, BitConnect used a network of promoters to offer and sell over $2 billion in securities without registering it on SEC. More so, this complaint was filed in the United States District Court for the Southern District of New York, from about January 2017 to January 2018. Apart from this, the complaint states that BitConnect did not register as broker-dealers as required by the federal securities law.

Lara Shalov Mehraban, New York SEC’s Associate Regional Director stated,

We allege that these defendants unlawfully sold unregistered digital asset securities by actively promoting the Bitconnect lending program to retail investors. We will seek to hold accountable those who illegally profit by capitalizing on the public’s interest in digital assets.

Of note, BitConnect collapsed in 2018 after the state regulators in Texas and North Carolina filed a cease-and-desist letter against its lending and exchange platform.

In addition, the SEC charges the U.S promoters including Trevon Brown (a.k.a. Trevon James), Craig Grant, Ryan Maasen, and Michael Noble (a.k.a. Michael Crypto) with violating the registration provisions of federal securities law.

According to the complaint, the promoters received commissions based on their success in soliciting funds. Thus, the complaint seeks injunctive relief, disgorgement plus interest, and civil penalties.

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Britney is a market analyst who covers stories about the cryptocurrency world. She holds a Business Administration Degree in Finance and aims to let the readers understand crypto from a beginner perspective.