SEC Sues BitConnect Founder for Suspected $ 2 Billion Crypto Fraud | Currency News | Financial and business news

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The SEC on Wednesday sued the founder of BitConnect over an alleged $ 2 billion crypto fraud, according to court documents first reported by Bloomberg Law.

Satish Kumbhani is accused by the SEC of mis-selling securities, raising $ 2 billion from investors in an offer that was not properly registered with regulators. The increase in security took place in January 2017.

According to the SEC, Kumbhani and Glenn Arcaro, a promoter, improperly sold securities related to BitConnect’s alleged “loan program” throughout 2017. The defendants falsely told investors that it could generate monthly returns of up to 40% with its “software volatility trading bot.” , according to the complaint.

The SEC alleges that such a business strategy did not exist.

In May, the SEC sued five promoters linked to BitConnect who pushed the program by creating testimonials on YouTube. The promoters received commissions based on their success in attracting new investors. According to the SEC, Arcaro received more than $ 24 million in referral commissions.

The promoters paid 190 bitcoins and $ 3.5 million to the SEC to settle the fees.

BitConnects closed in 2018 after receiving cease and desist letters for unauthorized sale of securities and falling victim to DOS cyberattacks.

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