Key Takeaways
- SEC indicts the founder of BitConnect on fraud charges
- BitConnect is said to have stolen $2 billion from investors
- The company shut down in 2018 following fraud allegations from investors globally
This Wednesday, September 1, the SEC reported that it filed a lawsuit against the founder of BitConnect, Satish Kumbhani, and Glenn Arcaro, one of the main promoters of the Ponzi scheme in the United States.
The legal action was filed in the Southern District Court of New York.
The statement details that both Kumbhani and Arcaro are indicted for fraud, with more than $2 billion in losses from investors.
In addition, the agency alleges that the two people were offering fraudulent sales of securities not registered under US law.
Earlier this year, the SEC sued five other people involved with BitConnect.
The defendants were promoters of the scheme in the United States, with tasks such as attracting clients through social networks and with promotional videos on YouTube.
BitConnect was a popular crypto project that issued its token in 2017.
However, after allegations of fraud, US regulators clamped down on the company, and it ended up shutting down in 2018.
Since then, dozens of accusations against the company have arisen in countries like the United States, the United Kingdom, Singapore, Australia, and India.
The FBI also created a program to find victims of BitConnect, as has reviewed this medium.
This development shows that the cryptocurrency industry can be a tough place for beginners. Several projects claim to be legit but are fraudulent.
Therefore, it is important to only invest in projects that top crypto exchanges like Remitano have vetted.
What are your thoughts on the SEC’s decision to sue BitConnect founder?
