The U.S. Securities and Exchange Commission is filing charges against the crypto lending platform BitConnect and two of its top executives.
The SEC alleges BitConnect defrauded retail investors out of $2 billion by selling unregistered investments in a “lending program,” according to a press release.
BitConnect claims they utilized a “volatility software trading bot” to generate exorbitantly high returns. However, the SEC claims the lending platform instead siphoned investors’ money away into wallets controlled by the company and its founder, Satish Kumbhani.
The regulator is also filing charges against Kumbhani and Glenn Arcaro, who worked as the company’s “top promoter” in the U.S.
Lara Shalov Mehraban, associate regional director of the SEC’s New York regional office, says,
“We allege that these defendants stole billions of dollars from retail investors around the world by exploiting their interest in digital assets. We will aggressively pursue and hold accountable those who engage in misconduct in the digital asset space.”
Kumbhani pleaded guilty to criminal charges related to a parallel action by the Department of Justice (DOJ).
In May, the SEC filed complaints against Trevon James, Craig Grant, Ryan Maasen, and Michael Noble, who also served as promoters of the BitConnect lending program, and Joshua Jeppesen, who represented the company in promotional events.
The SEC says it has reached settlements with two of them.
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