The Securities and Exchange Commission [SEC] of the United States has reportedly hit five people part of the BitConnect Ponzi scheme with a lawsuit.
The crypto-verse isn’t new to scams and hacks. However, the surge in the price of all the assets paved the way to more scammy projects that further led to several losing out on investments. While officials had shot down a crypto Ponzi scheme, BitConnect back in 2018, news pertaining to the platform has once again started to surface.
BitConnect makes headlines, once again
A platform started out in 2016 and urged customers to loan their cryptocurrency to garner massive returns. While BitConnect pocketed significant gains of about $2 billion, the FBI intervened in 2019 and looked for the victims of this scam. As this case persists, the SEC went on to file a lawsuit against five people, namely, Trevon Brown, Craig Grant, Ryan Maasen, and Michael Noble for promoting the Ponzi scheme.
The aforementioned individuals had reportedly formulated YouTube videos in order to recruit more people to be a part of the sham. Since the entire scheme was a multi-referral business, these promoters went on to earn a commission for bringing in more people.
Furthermore, this lawsuit was filed by the SEC in the United States District Court for the Southern District of New York accusing all five individuals of aiding the program.
Lara Shalov Mehraban, Associate Regional Director of SEC’s New York Regional Office, addressed the same in SEC’s recent press release and stated,
“We allege that these defendants unlawfully sold unregistered digital asset securities by actively promoting the BitConnect lending program to retail investors. We will seek to hold accountable those who illegally profit by capitalizing on the public’s interest in digital assets.”
While this platform hasn’t been functioning for a while now, the SEC hopes to garner “injunctive relief, disgorgement plus interest, and civil penalties” through its latest lawsuit.