SEC Sues Five People Over BitConnect Lending Program

The BitConnect saga is coming to a close, five years after it's beginning.

A Securities and Exchange Commission (SEC) civil lawsuit has been filed against five individuals allegedly involved in promoting BitConnect’s “lending program”. BitConnect shut down it’s main lending platform operations in 2018 after regulatory warnings and allegations of fraud.
The SEC’s Civil Lawsuit
In a press release issue today on the SEC website, the body alleges that the individuals contributed to promoting and raising over $2B from retail investors in an unregistered digital asset securities offering. The issued complaint alleges that a network of promoters, four of the five defendants, offered and sold securities as part of the platform’s lending program without being registered broker-dealers, and without registering the securities with the SEC. This includes a flurry of “testimonial” style videos, the press release states, uploaded to YouTube to justify the merits behind the program. Promoters received commissions based around their success of soliciting funds, the complaint states.
The fifth individual listed in the complaint is accused of “aiding and abetting” the unregistered offering and sales, as a liaison between BitConnect and the promoters, and as a company representative at events and conferences.
In the press release statement, New York SEC Associate Regional Director Lara Shalov Mehraban stated “we allege that these defendants unlawfully sold unregistered digital asset securities by actively promoting the BitConnect lending program to retail investors. We will seek to hold accountable those who illegally profit by capitalizing on the public’s interest in digital assets.”
Related Reading | Crypto YouTuber Draws Parallels Between SafeMoon And BitConnect
The BitConnect History
The platform initially launched in 2016, paralleled with the BitConnect Coin (BCC); the company leveraged a so-called “trading bot” and offered high-yield returns to users with daily calculated interest. Within the following year, UK government bodies were demanding BitConnect to verify it’s legitimacy, and by 2018, the operations started to shut down following increased government pressure in the U.S.
The BitConnect Coin, at it’s peak trading at nearly $500, immediately dropped over 90% following the shutdown. State securities divisions had started to apply pressure right before the shutdown, including alleging that BitConnect was a Ponzi scheme, and that BitConnect was not registered to sell securities in their respective states. Within weeks, BitConnect’s assets were frozen following a temporary restraining order.
It was undoubtedly a dramatic rise and fall for BitConnect. Take a blast from the past with our NewsBTC write-up following the platform’s shutdown.

$XRP is the latest token to face SEC scrutiny. | Source: XRP-USD on TradingView.com
SEC Scrutiny
With continued emergence in broader crypto and blockchain technologies, platforms, and projects, the SEC has been active in recent years. Most notably, Ripple’s XRP has been at the forefront of SEC investigation, and is speculated to potentially developing a “Ripple Test”, as the Howey Test could be put to the max as part of the SEC’s review. Generally speaking, many see Ripple Labs as being plenty capable to overcome the SEC’s scrutiny, and Ripple CEO Brad Garlinghouse recently stated that Ripple Labs could very likely go public following the SEC’s resolution. The SEC is alleging that Ripple engaged in lobbying efforts to alter the public’s perception of XRP.
Related Reading | Here’s Why Despite SEC Charges, XRP Will Soar Again Someday

Featured image from Pixabay, Charts from TradingView.com

bitcoin
Bitcoin (BTC) $ 66,493.82
ethereum
Ethereum (ETH) $ 3,252.21
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 610.08
solana
Solana (SOL) $ 157.35
usd-coin
USDC (USDC) $ 0.999992
staked-ether
Lido Staked Ether (STETH) $ 3,252.04
xrp
XRP (XRP) $ 0.546119
dogecoin
Dogecoin (DOGE) $ 0.161609
the-open-network
Toncoin (TON) $ 5.81
cardano
Cardano (ADA) $ 0.498673
shiba-inu
Shiba Inu (SHIB) $ 0.000027
avalanche-2
Avalanche (AVAX) $ 39.04
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 66,566.84
polkadot
Polkadot (DOT) $ 7.47
tron
TRON (TRX) $ 0.113475
bitcoin-cash
Bitcoin Cash (BCH) $ 504.63
chainlink
Chainlink (LINK) $ 15.45
near
NEAR Protocol (NEAR) $ 6.96
matic-network
Polygon (MATIC) $ 0.751202
internet-computer
Internet Computer (ICP) $ 14.70
litecoin
Litecoin (LTC) $ 87.16
uniswap
Uniswap (UNI) $ 8.10
leo-token
LEO Token (LEO) $ 5.74
dai
Dai (DAI) $ 1.00
hedera-hashgraph
Hedera (HBAR) $ 0.129521
blockstack
Stacks (STX) $ 2.89
first-digital-usd
First Digital USD (FDUSD) $ 1.00
aptos
Aptos (APT) $ 9.84
ethereum-classic
Ethereum Classic (ETC) $ 27.95
mantle
Mantle (MNT) $ 1.15
crypto-com-chain
Cronos (CRO) $ 0.131854
render-token
Render (RNDR) $ 9.15
filecoin
Filecoin (FIL) $ 6.45
immutable-x
Immutable (IMX) $ 2.39
stellar
Stellar (XLM) $ 0.119355
cosmos
Cosmos Hub (ATOM) $ 8.83
dogwifcoin
dogwifhat (WIF) $ 3.34
okb
OKB (OKB) $ 55.55
pepe
Pepe (PEPE) $ 0.000008
bittensor
Bittensor (TAO) $ 495.98
renzo-restaked-eth
Renzo Restaked ETH (EZETH) $ 3,156.35
arbitrum
Arbitrum (ARB) $ 1.18
vechain
VeChain (VET) $ 0.042251
xtcom-token
XT.com (XT) $ 3.05
kaspa
Kaspa (KAS) $ 0.128912
the-graph
The Graph (GRT) $ 0.293226
maker
Maker (MKR) $ 2,988.07
optimism
Optimism (OP) $ 2.56
fetch-ai
Fetch.ai (FET) $ 2.52