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BitConnect Founder Sued as SEC Alleges $2 Billion Crypto Scheme

  • Crypto platform failed to register the offering, SEC says
  • The regulator sued five of the plot’s promoters in May

Federal regulators sued the founder of BitConnect, a cryptocurrency exchange platform, for fraudulently raising more than $2 billion from investors in an offering that wasn’t registered with the U.S. Securities and Exchange Commission.

The SEC sued founder Satish Kumbhani, 35, and Glenn Arcaro, a promoter, for improperly selling securities tied to the company’s purported “lending program” for about a year starting in January 2017, according to a Wednesday complaint filed in federal court in New York. BitConnect falsely told investors that it could generate monthly returns as high as 40% with its proprietary “volatility software trading bot” when no such strategy existed, according to the SEC.