The top U.S. securities regulator sued the founder of the now-defunct cryptocurrency exchange platform Bitconnect over his presumed role in fraudulently raising about $2 billion from retail investors.
The U.S. Securities and Exchange Commission charged BitConnect founder Satish Kumbhani with illegally promoting BitConnect’s unregistered offering.
Glenn Arcaro and his firm Future Money Ltd are also charged with fraud, they received more than $24million in “referral commissions” and “development of funds” while promoting BitConnect.
The SEC is seeking fines, Arcaro declared liable to related U.S. criminal charges. BitConnect created a digital token called BitConnect coin that is used for exchange for Bitcoin, the cryptocurrency.
Investors in a BitConnect were told to use software (volatility Software Trading Bot) that could provide returns of 40% per month, and showing gains of about 3700% per year.
After the price of BitConnect Coin dropped by 92% many BitConnect investors lost so much of their money.
The SEC had filed a lawsuit against five other BitConnect promoters. Judgments for the same require two promoters, Michael Noble and Joshua Jeppesen, and Jeppesen’s finance to pay more than $3.5 million and 190 bitcoin.
The other three promoters have not been served the lawsuit.
