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BitConnect founder Satish Kumbhani charged with fraud

3 min reading

The top US securities authority has filed a suit against the founder of the formerly cryptocurrency exchange platform BitConnect.

The top-US securities regulator sued the founder of the non-functioning cryptocurrency exchange platform BitConnect over his alleged role in fraudulently raising at least $2 billion from thousands of retail investors. 

While dilating a civil case declared during May, the US securities and Exchange and Commission charged BitConnect founder Satish Kumbhani an Indian citizen with lying about BitConnects capability to create profits and violating the registration laws meant to protect investors. The SEC charged promoter Glenn Arcaro in a lawsuit in Manhattan Federal court they also charged his fir, Future Money with Fraudulently receiving more than $24 million in “referral commissions” and more sums as BitConnect’s top US promoter.

Arcaro pleaded guilty on Wednesday to a criminal wire fraud conspiracy charge before US Magistrate judge Mitchell Demblin in San Diego. The SEC lawsuit is trying to impose fines, recoup ill-gotten gains and other relief. It was founded in 2016, BitConnect created a digital token known as BitConnect coin which could be exchanged for Bitcoin the popular cryptocurrency. According to the SEC investors in a BitConnect “lending programme” usually used a “volatility software trading bot” which could create returns of 40 percent per month and were given imaginary returns of 3,700 percent annualised gains. 

Regulators believe investors lost most of their money after the price of BitConnect coin decerased by 92 percent on January 16, 2018. Prosecutors believe this to be a “textbook ponzi scheme” by paying earlier investors with new investor money. Based on reports it is said that it has been difficult to track down Kumbhani. It has attained judgements from two promoters Michael Noble and Joshua Jeppesen and Jeppesen’s fiancée to pay more than $3.5 million and BTC 190. The other promoters have yet not responded to the lawsuit or not been served. 

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