SEC: Alleged BitConnect masterminds charged

The SEC directs its investigation against six people close to BitConnect. They are said to have received up to $ 1.3 million from promoting the alleged crypto scam.

The wheels of the bureaucracy grind slowly, but they paint. Crypto villains who cheated customers through illegal projects during the last bull market in 2017 can therefore still fall on their feet years later. Those responsible for the alleged BitConnect scam are now making this experience. Because as can be seen from a corresponding press release from the SEC, the US Securities and Exchange Commission indicts a number of individuals who are said to be behind BitConnect.

The allegation is “conducting an unregistered sale of securities in the form of investments in the BitConnect loan program.” The organization, which was active between February 2016 and February 2018, is said to have taken about two billion US dollars (USD) from investors. And that without ever having been registered as a company.

At the time, BitConnect consisted of a complex network of promoters and managers who promised investors returns of up to 40 percent per month. According to BitConnect, the promises that are lucrative even for crypto relationships should come from Bitcoin trading using bots. Alone: ​​There has probably never been such a bot. The fact that the house of cards collapsed after just one year was hardly surprising given the known crypto volatility. Because BitConnect actually had features of a so-called Ponzi system (also known as a pyramid scheme). Because early investors were simply paid off with the money they had newly arrived. There was no real generation of profits that the system could support.

A total of six people are now accused (Trevon B., Craig G., Joshua J., Ryan M., Michael N. and Laura M.), who are said to have belonged to BitConnect’s top staff. The SEC accuses them of “having illegally sold securities without first having properly registered them.” For every new investor that the accused have integrated into the BitConnect system, they are said to have received up to seven percent commission, according to the indictment. It jumped up to 1.3 million USD in rewards for top promoters like Craig G., as the SEC writes.

The rise and fall of BitConnect

At the time, BitConnect was one of the most colorful projects on the crypto market. On the one hand, this is due to the steep ascent career of the native coin BCC. On the other hand, BCC made a name for itself through meme-like Internet videos. The coin shot from 0 to over 500 USD in the first few months and temporarily ranked 13th among the top cryptocurrencies. However, it fell back to one USD within days in 2018 due to prosecution by British and US authorities. Thousands of investors were cheated.

BitConnect became notorious above all through a viral Internet video that promoter Carlos Matos shows at a conference in Thailand.

The defendants in the latest SEC lawsuit are not the first to get into legal trouble because of their involvement in BitConnect. The process against the former chief promoter of Australia, John Bigatton, has been running since 2018. India chief Divyesh Darji was arrested by the authorities there in August 2018.

Matos himself is doing his business in the food industry these days – apparently unmolested by law enforcement. Instead of obscure crypto games, he is now promoting nutritional theories such as intermittent fasting on YouTube.

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