The cryptocurrency sector is no stranger to fraud. According to the SEC, BitConnect is one of them. The US Securities and Exchange Commission recently charged BitConnect founder over an alleged fraud involving 2 billion dollars.
According to the SEC, the crypto exchange founder duped thousands of retail investors into gathering the amount. Satish Kumbhani, the BitConnect founder, is facing a civil case initiated in May from the SEC. According to the Commission, Satish lied about BitConnect’s ability to incur profits and even violated the registration laws established to secure investors.
In another lawsuit in the federal Manhattan court, the Commission charged Glenn Arcaro and Future Money Limited for fraudulently getting over 24 million dollars in referral commission and other revenues as BitConnect’s promoter.
Glenn pleaded guilty recently to another related bank wire fraud in front of US Magistrate Judge Mitchell Dembin. Glenn is to be sentenced on November 15th. The current lawsuit by the SEC aims to regain unethical gains, impose charges, and provide relief.
Established in 2016, BitConnect developed a virtual token named the BitConnect Coin. The platform presented the BitConnect Coin as a token that can be exchanged with Bitcoin.
According to the SEC, BitConnect told investors that the platform used a volatility software trading bot to render 40% returns every month. The investors were promised a fictitious 3,700% return per annum.
However, investors lost most of their money in 2018 when BitConnect Coin dipped 92%. Prosecutors state that BitConnect used a textbook Ponzi scheme by rewarding old investors with new investor funds.
Satish (35) is an Indian resident who has lived chiefly in Surat. However, his current location is unknown. On the other hand, Glenn (44) resided in Los Angeles and constructed Future Money Limited in Hong Kong.
Authorities have been unable to locate Satish, and his lawyers have not made any comments either. The SEC also sued five more BitConnect promoters on May 28th.