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Promoters Sued Over $2 Billion Crypto Scheme BitConnect

Federal jurisdiction has charged a group of five individuals for endorsing a cryptocurrency exchange program to amass more than 2 billion USD from private investors in an illegal offering not registered with the US Securities and Exchange Commission as mandated by law.

A civil lawsuit was filed on Friday alleging that a company under the name BitConnect was using promotors to market the securities, without going through the required steps to register the promoted offering with the SEC or having themselves registered as brokers as mandated by law.

The SEC charged the promoters for endorsing BItConnect’s lending program in the year 2017 by posting testimonials on YouTube, advertising the possible benefits of investing in the program, sometimes even several times in one day according to SEC’s statement on Friday. The individuals promoting the exchange program received commissions as a result of their success in bringing in investor money, each individual making more than 2.6 million USD.

BitConnect shut down its trading platform in January 2018 after it received cease and desist letters twice from public authorities for the illegal sale of securities and getting denial of service attacks. The exchange program claimed to let investors receive interest on their cryptocurrency balance by investing their money or lending.

This suit happens to be the most recent in a series of coercive measures that the SEC has taken regarding digital assets beginning in 2013. The actions were taken against crypto brokers issuers, and exchanges have emerged as cryptocurrencies such as Bitcoin have gained mass popularity throughout recent years amidst severe price fluctuation. According to financial analysts, the SEC has accumulated around 1.77 in penalties that come from the settlement of cases.

The jurisdiction has cautioned private investors of the risks associated with investing in the tokens, cautioning that defrauders may be exploiting them to draw private investors into scams.

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