SEC sues five people over BitConnect loan program


The U.S. Securities and Exchange Commission (SEC) has filed a civil lawsuit against five individuals suspected of participating in the promotion of BitConnect’s “loan program.” After receiving regulatory warnings and fraud allegations, BitConnect shut down its main lending platform business in 2018.

Civil litigation by the U.S. Securities and Exchange Commission

in Press release Published on the US Securities and Exchange Commission website today, the agency claims that these individuals have contributed to the promotion and raising of retail investors of more than $2B in the issuance of unregistered digital asset securities. The published complaint alleges that the four promoter networks of the five defendants provided and sold securities as part of the platform’s lending program without a registered broker-dealer, and did not register securities with the US Securities and Exchange Commission. The press release stated that this included a series of “recommended” style videos uploaded to YouTube to prove the value behind the program. The complaint alleges that the promoters receive commissions based on their success in raising funds.

The fifth person listed in the complaint is accused of “facilitating and instigating” unregistered issuance and sales, acting as a liaison between BitConnect and the promoter, and acting as a company representative at events and conferences.

In the press release, New York SEC Regional Deputy Director Lara Shalov Mehraban stated: “We accuse these defendants of illegally selling unregistered digital asset securities by actively promoting the BitConnect lending program to retail investors. We will pursue those who exploit the public’s exposure to digital assets. The responsibility of the person who makes illegal profits.”

Related Reading | Encrypted YouTuber draws similarities between SafeMoon and BitConnect

BitConnect history

The platform was originally launched in 2016, parallel to BitConnect coin (Bcc); The company uses so-called “trading robots” to provide users with high-yield returns that calculate daily interest.In the next year, the British government agency required BitConnect to verify its legitimacy. By 2018, due to increased pressure from the US government, the business began to close

Bit connection coin, In a peak transaction close to $500, it fell by more than 90% immediately after it was closed. State securities departments began to exert pressure before the closure, including claims that BitConnect was a Ponzi scheme and that BitConnect was not registered to sell securities in their respective states. Within a few weeks, BitConnect’s assets were frozen after a temporary restraining order.

For BitConnect, this is undoubtedly a dramatic ups and downs.Explosion from the past Our NewsBTC report After the platform is closed.

$XRP is the latest token to face SEC scrutiny. | Source: XRP-USD on TradingView.com

U.S. Securities and Exchange Commission review

With the continuous emergence of more extensive encryption and blockchain technologies, platforms and projects, the SEC has been very active in recent years. Most notably, Ripple’s XRP has been at the forefront of SEC investigations, and it is speculated that a “Ripple test” may be developed because the Howey test may be maximized as part of the SEC review. Generally speaking, many people believe that Ripple Labs is capable of overcoming SEC scrutiny, and Ripple CEO Brad Garlinghouse recently stated that Ripple Labs is likely to be listed after the SEC’s decision. The SEC accused Ripple of participating in lobbying activities to change the public’s perception of XRP.

Related Reading | This is why XRP will soar again one day despite allegations made by the SEC

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