SEC File Charges Against BitConnect Founder

In fraud-related news, the United States Securities and Exchange Commission has sued the founder of Bitconnect for his role in the shocking Cryptocurrency scam worth $2 billion.

SEC disclosed in a press release that the agency had filed a lawsuit against Satish Kumbhani, the founder of BitConnect, which the regulatory authority describes as a “global fraudulent and unregistered offering of investments into a program involving digital assets.”

Khumbhani is the leading promoter of BitConnect, whose program promised to offer investors high returns but later defrauded them of all funds they invested, totalling $2 billion.

Part of the SEC allegation against Khumbhani is that he, alongside others syndicates, moved investors’ funds to digital wallets to enrich themselves, plus they falsely presented BitConnect as an establishment with a large network of promoters around the globe.

Speaking on this, Associate Regional Director of SEC’s New York Regional Office, Lara Shalov Mehraban, said, “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.”

Towards this, the objective of SEC is to compose findings, which would lead to recovering some of the funds, among other things. However, at the time of writing, Khumbhani’s whereabouts are unknown.

Cases like this serve a good lesson to investors who are always interested in a scheme that promises high returns. The BitConnect scam is one of the most notable in the cryptocurrency market. 

It has since it happened made investors adjusted their belief of every crypto project and its claims. However, crypto scams have still not ended. Another notable one is the Africrypt scam that saw $3.6 billion stolen.

This is one of the reasons why regulators are up and doing in their examination of the industry, most importantly to protect investors, which is their utmost priority.

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