In what appears to be one of the biggest cases ever brought involving digital assets, U.S. regulators filed cases against a group of cryptocurrency promoters who assisted in raising over $2 billion from investors, promising monthly returns of 40%.
Five individuals were sued in Manhattan Federal Court by the U.S. Securities and Exchange Commission on Friday because of their promotion of BitConnect, citing the defendants went against laws that require them to register as brokers while also getting involved in conducts that violated investor-protection rules. The agency, however, did not accuse the involved of fraud.
The lawsuit aims to have the suspects return the profit they made and pay corresponding monetary penalties.
What is BitConnect?
Founded in 2016, BitConnect was a digital asset that was sold in exchange for the world’s most valuable cryptocurrency, bitcoin.
It promised investors to make their bitcoin more profitable by using an automated trading bot. According to the SEC, the currency was to be locked up for terms ranging from four to 10 months.
Eventually, BitConnect lost 92% of its value and thousands who invested in the project lost nearly all, if not all, of their funds. Complaints started to arise until they culminated in the legal action taken by the regulatory body.
Who is being sued?
According to The Wall Street Journal, the SEC sued BitConnect promoters Trevon Brown of Myrtle Beach, South Carolina, Craig Grant of Kissimmee, Florida, Ryan Maasen of Tulsa, Oklahoma, and Michael Noble of Pacific Palisades, California., as well as Joshua Jeppesen of East Falmouth, Massachusetts, who acted as liaison between the promoters and BitConnect.
SEC is also currently engaged in a legal battle against Ripple Labs as it also accused the company of violating securities laws by trading its native XRP token that was not registered as a security.
Image courtesy of Cointelegraph News/YouTube
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Source: https://bitcoinerx.com/blockchain/u-s-sec-sues-five-promoters-associated-with-bitconnect/
