The U.S. Securities and Exchange Commission (SEC) obtained judgments against promoters of the Bitconnect crypto Ponzi scheme. The litigation release published on August 19, indicates that the SEC won $12 million from Bitconnect’s Michael Noble and Joshua Jeppesen alongside a relief defendant.
SEC to Squeeze $12 Million from Bitconnect Promoters
Just before the 2017 crypto bull run, a digital currency-based pyramid scheme called Bitconnect started in 2016, allowing users to lend Bitconnect coin (BCC) for high yields. The platform introduced high yield lending well before the swathe of decentralized finance (defi) liquidity pools were conceived, but Bitconnect started showing signs of being a Ponzi. The Ponzi accusations really started to gain momentum when Bitconnect shut down the earning platform on January 16, 2018.
The SEC accuses Bitconnect and its promoters of running a $2 billion operation that facilitated the purchasing and selling of unregistered securities. The SEC press release published on Thursday indicates the judgment came down on the three defendants last week.
“On August 13, 2021, the United States District Court for the Southern District of New York entered a judgment against Michael Noble (a.k.a. Michael Crypto) and a final judgment against Joshua Jeppesen for their involvement with BitConnect and the promotion of its “lending program,’” the SEC announcement notes. The U.S. regulator continued by adding:
The court also entered a final judgment against Laura Mascola as a relief defendant. Pursuant to the judgments, the defendants and a relief defendant have been ordered to collectively pay more than $3.5 million and 190 bitcoin in disgorgement and prejudgment interest.
Throughout the months of December 2017 and January 2018, the native token BCC was trading for over $460 per BCC. Today, BCC is almost worthless at $0.0000084 per unit and the token has been delisted from mostly all the exchanges worldwide.
The BCC token post ICO price was $0.17 per unit when the token went live. Many Bitconnect promoters and participants thought the project was sustainable, even though red flags and insolvency accusations were reported regularly.
The January shutdown of the rewards program was due to the fact that U.S. law enforcement and regulators from North Carolina and Texas issued cease and desist orders against the Bitconnect business and administrators. The SEC’s press release detailed that the investigation into Bitconnect is still “ongoing,” and is being conducted by the U.S. regulator’s Retail Strategy Task Force.
What do you think about the U.S. regulator obtaining judgment for $12 million from Bitconnect promoters? Let us know what you think about this subject in the comments section below.
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