The Securities and Exchange Commission (SEC) civil lawsuit has been filed against five individuals suspected of participating in the promotion of BitConnect’s “loan plan.” After receiving regulatory warnings and fraud allegations, BitConnect shut down its main lending platform operations in 2018.
SEC’s civil litigation
in Press release The agency published the allegation on the SEC website today, claiming that these individuals raised more than US$2B from retail investors in the issuance of unregistered digital asset securities. The complaint was filed that the promoter network (four of the five defendants) provided and sold securities as part of the platform’s loan program, without a registered broker-dealer, and no securities registration with the SEC. The press release states that it includes a series of “certificate” style videos that have been uploaded to YouTube to prove the merits behind the program. The complaint alleges that the promoter received a commission for successfully raising funds.
The fifth person listed in the complaint is accused of “assisting and teaching” unregistered products and sales, is the liaison between BitConnect and the promoters, and is the company’s representative at events and conferences.
Lara Shalov Mehraban, Associate Regional Director of the New York Stock Exchange, said in a press release: “We accuse these defendants of illegally selling unregistered products by actively promoting the BitConnect loan program to retail investors. Digital asset securities. We will use the public’s interests in digital assets to hold those who make illegal profits accountable.”
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BitConnect history
The platform was first launched in 2016, parallel to BitConnect coin (BCC); The company uses so-called “trading robots” and provides high-yield returns for users who calculate interest every day.In the following year, the British government agency required BitConnect to verify its legitimacy, and by 2018, as the pressure from the US government increased, the business began to shut down
BitConnect coinThe highest transaction price was close to $500, and it fell by more than 90% immediately after the suspension. The state securities department began to exert pressure before the closure, including claims that BitConnect was a Ponzi scheme and that BitConnect was not registered to sell securities in their respective states. Within a few weeks, under a temporary restraining order, BitConnect’s assets were frozen.
For BitConnect, it is undoubtedly a dramatic rise and fall.Hit with the past Our NewsBTC article After the platform is closed.
$XRP is the latest token to face SEC scrutiny. | Source: XRP-USD on TradingView.com
SEC review
With the continuous emergence of more extensive encryption and blockchain technologies, platforms and projects, the SEC has been very active in recent years. Most notably, Ripple’s XRP has been at the forefront of SEC investigations and is considered to have the potential to develop a “Ripple test” because the Howey test may play the biggest role in the SEC’s review. Generally speaking, many people believe that Ripple Labs is capable of overcoming SEC scrutiny. Ripple CEO Brad Garlinghouse recently stated that Ripple Labs is likely to go public after the SEC’s decision. The SEC accused Ripple of lobbying activities to change the public’s perception of XRP.
Related Reading| This is why despite the SEC allegations, XRP will soar again one day
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