BitConnect Founder Charged With $2 Bln Cryptocurrency Fraud

Share post:

The Securities and Exchange Commission charged BitConnect founder Satish Kumbhani with lying about BitConnect’s ability to generate $2 billion in profits from thousands of retail investors.

Founded in 2016, BitConnect developed a digital token called BitConnect Coin that could be exchanged for Bitcoin.

In a lawsuit filed in federal court in Manhattan, the SEC also charged promoter Glenn Arcaro and his firm Future Money Ltd, the top US promoter of BitConnect, of fraudulently receiving more than $24 million in “referral commissions” and other sums.

Arcaro pleaded guilty Wednesday to a similar fraud charge before U.S. Magistrate Judge Mitchell Dembin in San Diego.

The SEC said investors were informed in a BitConnect “lending program” that BitConnect was using a “volatility software trading bot” that would generate returns of 40% per month, and was awarded fictitious returns of 3,700% on an annual basis.

Prosecutors accused BitConnect of operating a “textbook Ponzi scheme” by paying former investors with new investor money.

For more information, view the original story from Reuters.

SUBSCRIBE NOW

Related articles

Cyber Security Today, May 20, 2024 -Ransomware gang claims it hit a Canadian internet provider

A ransomware gang claims it hit a Canadian internet provider. Welcome to Cyber Security Today. It's Monday May 20th,...

Resignations at OpenAI. Hashtag Trending for Friday, May 17, 2024

The question changes from “where’s Ilya” to what took so long?  Did Musk’s Neuralink team know there might...

Google does the unthinkable – reportedly erasing a 125 billion dollar pension fund

It's reported that Google inadvertently erased the Google Cloud account of UniSuper, an Australian pension fund valued at...

MIT students exploit blockchain vulnerability to steal 25 million dollars

Two MIT students have been implicated in a highly sophisticated cryptocurrency heist, where they reportedly exploited a vulnerability...

Become a member

New, Relevant Tech Stories. Our article selection is done by industry professionals. Our writers summarize them to give you the key takeaways