The $ 2 billion crypto fraud system Bitconnect and its founder were indicted in the US In a parallel enforcement lawsuit, a Bitconnect director and top promoter in the US has known to be criminally guilty, ”said the US Department of Justice (DOJ ) with.
US authorities are taking action against Bitconnect and its founder
The US authorities continue to crack down on the fraudulent crypto trading scheme Bitconnect and its executives this week. “The Bitconnect scheme is believed to be the largest cryptocurrency fraud that has ever been criminally charged,” the DOJ described.
The US Securities and Exchange Commission announced on Wednesday that it had filed a lawsuit against Bitconnect, its founder Satish Kumbhani, its leading US promoter Glenn Arcaro, and its affiliate Future Money Ltd. The SEC determined that Kumbhani, 35 years old, is an Indian national residing in Surat, India, but whose current whereabouts are unknown.
According to the commission:
You defrauded retail investors of $ 2 billion in a fraudulent and unregistered global offer to invest in a digital asset program.
The SEC’s lawsuit filed in the US District Court for the Southern District of New York states that “Defendants made a fraudulent and unregistered offer and sale of securities by investing in a” lending program “from early 2017 through January 2018 offered ‘by Bitconnect. “
The SEC states that the Bitconnect Lending Program “ultimately managed to obtain more than 325,000 bitcoins from investors worldwide”.
The lawsuit alleges that the “defendants have, among other things, falsely stated that Bitconnect would use its allegedly proprietary” volatility software trading bot, “which would generate exorbitant returns on investor deposits.” The Commission added:
Bitconnect and Kumbhani have built a network of promoters around the world and rewarded them for their advertising efforts and reach with commissions, a significant part of which they withheld from investors.
“The SEC’s Complaint Costs” [the] Defendants who violate the anti-fraud and registration provisions of federal securities laws. The complaint seeks interim injunctions, levy plus interest and civil penalties, ”the Commission continued.
The regulator previously reached settlements with two of the five people it charged in connection with promoting the Bitconnect program.
Bitconnect’s top US director and promoter pleads guilty to criminal charges
In a parallel action, the Justice Department announced on Wednesday that Arcaro, a Bitconnect director and the program’s lead US promoter, has pleaded guilty. The DOJ described:
Arcaro admitted that he made no less than $ 24 million in the Bitconnect fraud conspiracy, all of which he has to repay to investors according to court documents.
The Justice Department stated that the maximum sentence for Arcaro is “twenty years in prison, a $ 250,000 fine, or double the gross profit or loss from the crime, whichever is greater”; Decay and reparation. “
What do you think of the action taken by the US authorities against Bitconnect and its executives? Let us know in the comment section below.
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