SEC Files Legal Charges, Indicts BitConnect Founder for Large-Scale Ripoff
SEC Files Legal Charges, Indicts BitConnect Founder for Large-Scale Ripoff By Angel Di Matteo @shadowargelAfter

filing charges against several of its promoters a few months ago, the SEC now accuses the founder of BitConnect

of engaging in deceptive offers and large-scale scam crimes.


The U.S. Securities and Exchange Commission (SEC) officially filed legal charges against the founder and some of the promoters of BitConnect,

one of the most emblematic scams within the digital currencies ecosystem, which stole around USD $2 billion from investors attracted by its commercial offer.

This was revealed by the SEC in a document published through its official website, where the regulatory body this time brings charges against Satish Kumbhani, founder of BitConnect,

as well as the company affiliated with the international scam.

In this regard, SEC officials point out that BitConnect offered an alleged “trading bot”

that would take advantage of market volatility to generate profitability, so it took investors’ capital and promised them returns of 1% per day. However, the organization took the money and sent it to personal wallets, using it exclusively for personal purposes. Regarding

these facts, Lara Mehraban, Associate Regional Director of


SEC’s New York Regional Office

, commented:

“We allege that these defendants stole billions of dollars from investors around the world by taking advantage of existing interest in digital assets. We will aggressively pursue and hold accountable those who engage in misconduct in the cryptoasset space.”

A Brief History of BitConnect

The filing of charges against the founder of BitConnect

stands as yet another episode in the history of one of the most memorable and iconic scams within the digital currency ecosystem, which transcended borders, captured a large amount of capital, and fell shockingly amidst finger-pointing by regulators in different countries.

Beyond the alleged marketing of a Bot that would multiply the investment and derive excessively high returns, BitConnect

is accused of operating a pyramid-type scam, since its referral scheme also sought to attract a greater number of victims, and part of the capital raised from new members was used to remunerate older ones, generating an inorganic model that was unviable if revenues fell.

Notably, the company also launched a token called BCC, which it opened in

markets trading at around USD $500 per unit to then drop to less than USD $1, mainly hurting the users of it.

Launched in 2017 and shut down in 2018, BitConnect left us with one of the most memorable memes within the cryptocurrency space, where one of the main promoters of the company, Carlos Matos, became world famous for being the visible face of one of the most iconic scams in all of history.

SEC Against Crypto Scams

While analysts and enthusiasts claim that the SEC’ s measures come somewhat late, the truth is that the regulatory body has been taking an increasingly strong approach against scams within the cryptocurrency sector.

As for BitConnect, in May of this year the SEC filed charges against four promoters linked to the company, which it accused of illegally trading unregistered securities, promoting irregular financial programs and engaging in large-scale scamming offenses.

Regarding other cases, the SEC is currently fighting in court with XRP token issuer Ripple, which it accuses of engaging in illegalities when marketing the said digital currency. Although the case is currently still ongoing, it seems that the company that designs solutions based on Blockchain based solutions company seems to be gaining more victories with every turn of events.

It is worth noting that already the SEC is expanding its reach and beginning to pay attention to certain protocols within the DeFi space, which is why it recently warned that some of the most recognized projects within the sector could fall under its jurisdiction.

Recommended reading

Source: CryptoPotato, SEC

Version by Angel Di Matteo / DiarioBitcoin

Image by Unsplash