Bitconnect and its founder were charged for a $2 billion crypto fraud scheme in the United States. According to the US Department of Justice (DOJ), “the Bitconnect crypto fraud scheme is assumed to be the largest crypto fraudulent activity charged criminally”.
There have been quite a few crypto scams in the past few months utilizing the anonymous identity concept. More so, taking advantage of the technology, the count of scammers and hackers has been growing. Likewise, the Bitconnect and the founder are charged for a crypto fraud scheme.
The U.S Securities and Exchange Commission filed a case against Bitconnect and its founder on Wednesday. The founder, Satish Kumbhani and top U.S promoter Glenn Arcaro have condemned criminal charges in US parallel enforcement action.
Significantly, the SEC noticed that the founder of Bitconnect’s age is 35, who is an Indian citizen. The complaint is filed in US District court for the Southern District of New York. It also states that the defendants engaged in a fraudulent and unregistered offering and sale of securities in the form of deposits in Bitconnect’s “Lending Program”. Moreover, this program has successfully gained 325,000 Bitcoins from investors around the world.
Defendants Used A False Trading Bot
According to the complaint, the defendants have falsely represented software to the investors. They have insisted that Bitconnect would deploy its specialised ‘volatility software trading-bot’ which will yield excessive gains using investors’ investment.
The SEC charges for violating the anti-fraud and registration provisions of the federal security laws. In a related case, the Justice department Announced on Wednesday that Arcaro, a Bitconnect founder and the scheme’s top promoter in the United States, had admitted guilt to criminal prosecution. The Department of Justice added:
“Arcaro admitted to earning no less than $24 million from the Bitconnect fraud conspiracy, all of which he must repay to investors, according to court documents.”
The officials have explained that the penalty for Arcaro is 20 years in prison, $250,000 fine or twice the biggest income or loss from the offence; forfeiture and restitution.
