Bitcoin News

U.S. SEC Files Charges Against 5 BitConnect Crypto Promoters.

The United States SEC [Securities and Exchange Commission] files charges against five individuals for their alleged involvement within the Bitconnect crypto platform that collapsed earlier in 2018.

In line with the SEC’s complaint, filed within U.S. District Court for the Southern District of New York, from about January 2017 to January 2018, Bitconnect used a network of promoters to purchase and sell over $2 Bln in securities without registering the offering with the SEC, and without being registered as broker-dealers as needed by the federal law.

“We allege that these defendants unlawfully sold unregistered digital asset securities by actively promoting the Bitconnect lending program to retail investors,” revealed Lara Shalov Mehraban, associate regional director of SEC’s NY office. “We will seek to carry accountable those who illegally profit by capitalizing on the public’s interest in digital assets.”

Bitconnect collapsed earlier in 2018 after state regulators in Texas and North Carolina filed cease-and-desist letters against its lending and cryptocurrency exchange platform.

The SEC’s complaint charges promoters along with U.S.-based Trevon Brown [aka Trevon James], Craig Grant, Ryan Maasen, and Michael Noble [aka Michael Crypto] with violating the registration provisions of federal securities laws. The complaint also alleged United States-resident Joshua Jeppesen with aiding and abetting Bitconnect’s offer and sale of securities.

The promoters touted the advantages of investing in Bitconnect’s lending program to prospective investors, along with the utilization of testimonial style videos and publishing them on YouTube, the SEC outlined within its update. Consistent with the complaint, the promoters received commissions supporting their success in soliciting funds.

The complaint seeks injunctive relief, disgorgement plus interest, and civil penalties. After the complaint was made public, Brown tweeted “I just became a villain again.”

While no criminal complaints were filed, the FBI has been investigating Bitconnect for the last three years. Brown revealed earlier in March 2018 that he had spoken with FBI agents, and therefore the federal investigator posted a notice in 2019 posing for investors to reach out.

A representative of the criminal division at the Department of Justice’s Southern District of NY office said no criminal charges were anticipated today.

Promotors of the project were arrested in other countries as well: Indian police arrested promotor Divyesh Darji earlier in 2018, while Australian authorities filed charges against John Bigatton last year.

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