On September 1, 2021, the U.S. Securities and Exchange Commission (SEC) announced that it had filed a complaint against BitConnect. Also included in the SEC’s action was Bitconnect’s founder, Satish Kumbhani.
The company allegedly did one of the biggest crypto Ponzi schemes ever to be charged criminally. By the time it went under, BitConnect had milked investors to the tune of $2 billion.
Allegations against Kumbhani and BitConnect
According to the SEC’s complaint, Kumbhani and BitConnect conducted a fraudulent offering and sale of securities. The scheme occurred as a “Lending Program” offered by BitConnect.
SEC claims Kumbhani tricked investors into depositing funds into the Lending Program. Furthermore, the watchdog stated that Kumbhani falsely claimed BitConnect would deploy a proprietary “volatility software trading bot” to generate high returns for investors.
However, instead of deploying investor…