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.
