In other fraud-related news, the US Securities and Exchange Commission has filed a lawsuit against Bitconnect's founder for his role in a $2 billion cryptocurrency scam.
In a press release, the SEC announced that it has filed a lawsuit against Satish Kumbhani, the founder of BitConnect, for a “global fraudulent and unregistered sale of investments into a program involving digital assets,” according to the regulatory authority.
Khumbhani is the leading marketer of BitConnect, a program that promised great returns but ultimately cheated investors out of $2 billion in assets.
According to the SEC, Khumbhani and other syndicates shifted investor funds to digital wallets in order to profit themselves, and they falsely promoted BitConnect as a company with a huge network of promoters around the world.
“We allege that these defendants stole billions of dollars from retail investors around the world by abusing their interest in digital assets,” said Lara Shalov Mehraban, Associate Regional Director of the SEC's New York Regional Office. Those who participate in misbehavior in the digital asset arena will be forcefully pursued and held accountable.”
The SEC's goal in this regard is to compile conclusions that, among other things, will lead to the recovery of part of the assets. Khumbhani's location is, however, unknown at the time of writing.
Cases like this teach a valuable lesson to investors who are continually looking for a high-return strategy. In the cryptocurrency business, the BitConnect fraud is one of the most well-known.
Since then, investors' perceptions of all cryptocurrency projects and their claims have shifted. Crypto frauds, on the other hand, aren't going away anytime soon. The Africrypt scam, which resulted in the theft of $3.6 billion, is another noteworthy example.
This is one of the reasons why authorities are conducting thorough examinations of the business, with the primary goal of protecting investors.
Stay up to date on the newest happenings in the crypto business by scrolling through The Dechained's latest crypto headlines.
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