Cryptocurrency News

SEC sues five people over bitconnect lending program


A Securities and Exchange Commission (SEC) civil lawsuit has been filed against five individuals allegedly involved in promoting Bitcoin’s “lending program”. BitConnect ceased its main lending platform operations in 2018 following regulatory warnings and allegations of fraud.

SEC’s Civil Litigation

In A press release Released today on the SEC website, the body alleged that individuals contributed to promoting and raising more than $ 2B from retail investors in the offering of unregistered digital asset securities. The complaint issued alleges that a network of promoters, four of the five defendants, offering and selling securities as part of the platform’s loan program without registered broker-dealers and without registering securities with the SEC We do. This includes a flurry of “testimonial” style videos, the press release said, uploaded to YouTube to justify the merits behind the program. The complaint states that the promoters received a commission based on their success in soliciting funds.

The fifth person listed in the complaint is accused of “aiding and abetting” the unregistered offering and sale, as a liaison between Bitconnect and promoters, and as a representative of the company at events and conferences.

In a press release, New York SEC Associate Regional Director Lara Shalov Mehraban stated, “We allege that these defendants illegally sold unregistered digital asset securities to retail investors by actively promoting the Bitconnect loan program. We Digital Asset I will try to hold those who are illegally profiting by taking advantage of public interest.

Related reading | Crypto YouTuber draws similarities between SafeMoon and BitConnect

Bitconnect history

The platform was initially launched in 2016, which is similar to Bitconnect The coin (BCC); The company took advantage of the so-called “trading bot” and offered users high-yield returns with daily calculated interest. Within the following year, UK government bodies were demanding Bitconnect to verify its legitimacy, and by 2018, operations began to cease following increased government pressure in the US.

Bitconnect The coin, at its peak trading at around $500, fell over 90% shortly after shutdown. State securities divisions began pressuring just before the shutdown, alleging that Bitconnect was a Ponzi scheme, and Bitconnect was not registered to sell securities in their respective states. Within a few weeks, Bitconnect’s assets were frozen after a temporary ban order.

This was undoubtedly a dramatic rise and fall for Bitconnect. Take a blast from the past Our NewsBTC Write-up After the platform is closed

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

SEC scrutiny

With the continued emergence in widespread crypto and blockchain technologies, platforms and projects, the SEC has been active in recent years. Most notably, Ripple’s XRP has been at the forefront of SEC investigations, and is presumably projected to develop a “Ripple Test”, as the Howe test may be kept at its maximum as part of the SEC’s review . In general, many consider Ripple Labs quite capable of recovering from the SEC’s investigation, and Ripple CEO Brad Garlinghouse recently stated that Ripple Labs was likely to go public following the SEC’s resolution. The SEC alleges that Ripple has engaged in lobbying efforts to change public perception about XRP.

Related reading | This is why despite the SEC fee, XRP will increase again someday

Featured image from Pixabay, Charts from TradingView.com



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