US Regulatory Bodies Sue Founder of Bitconnect for $2 Billion

Bitcoin is no stranger to being the center of attention. In fact, as the poster child of the entire crypto market, it has managed to thrive under it. However, while it was starting to reach new heights in popularity, more people wanted to get in on the action. And that is where most of these newer traders fell for some of the most vicious scams in the market.

Possibly the biggest fraud at the time was Bitconnect. While it certainly did frame itself as an innovator of the market, it turned out to be anything but. With a viral marketing campaign, their popularity managed to skyrocket. Their newfound popularity allowed them to accumulate over $2 billion in funds from retail investors. But when investors expected to receive some of their cash back, they were surprised to see that the company had dissolved and their money evaporated into thin air.

After a little over three years, regulators within the US have managed to get a hold of Bitconnect’s founder. Satish Kumbhani found himself charged by the US Securities and Exchange Commission. The main charges against him are that the company lied about its profitability. Bitconnect not only lied about its ability to generate profit, but it also failed to protect its investors by violating registration laws.

The commission has yet to find substantial proof that could indict the founder for Bitconnect. However, that has not stopped them from suing Kumbhani for $2 billion, for him allegedly taking part in the scam. Despite being an Indian citizen, Satish Kumbhani was still charged for lying about making false promises to investors.

Of course, the founder of Bitconnect is not the only one who is facing serious charges. Bitconnect’s top US promoter Future Money Ltd is also facing a lawsuit in the Manhattan federal court. Glen Arcaro, promoter for the infamous firm and owner of Future Money Ltd, was on the stand for questioning. The lawsuit concerned itself with the “referral commissions” that he fraudulently received of $24 million. It also details various others sums that the firm took throughout their working relationship with Bitconnect.

Furthermore, Arcaro is facing this lawsuit fresh off of pleading guilty to criminal wire fraud and conspiracy charges. The judge, US Magistrate Judge Mitchell, declared that his sentencing would take place in November.

This SEC lawsuit is to strip them of ill-gotten gains, along with fines and providing relief to investors. These investors were promised returns of up to 40% every month with their advanced trading bot. They were also told that their annualized return would round up to an absurd 3700%.