SEC goes after promoters of $2 billion crypto scheme, BitConnect

Rick Steves

BitConnect solicited investors for cryptocurrency-based programs that the company claimed would deliver annualized returns exceeding 100% or more.

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The Securities and Exchange Commission has filed an action against five promoters of the Ponzi scheme, BitConnect, who raised over $2 billion from retail investors in a global unregistered digital asset securities offering, the SEC alleged.

From January 2017 to January 2018, BitConnect used a network of promoters, including U.S.-based Trevon Brown (a.k.a. Trevon James), Craig Grant, Ryan Maasen, and Michael Noble (a.k.a. Michael Crypto) to market and sell securities in its “lending program.”

The promoters advertised the merits of investing in BitConnect’s lending program to prospective investors, including by creating “testimonial” style videos and publishing them on YouTube, sometimes multiple times a day.

In exchange, they received commissions based on their success in soliciting investor funds. Joshua Jeppesen served as a liaison between BitConnect and promoters and represented BitConnect at conferences and promotional events.

Lara Shalov Mehraban, Associate Regional Director of SEC’s New York Regional Office, commented: “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.”

The SEC is charging the promoter defendants with violating the registration provisions of the federal securities laws, and Jeppesen with aiding and abetting BitConnect’s unregistered offer and sale of securities.

Promoters of the BitConnect securities offering got burned across the globe. Last year, ASIC banned John Louis Anthony Bigatton in connection to the Ponzi scheme.

BitConnect solicited investors for cryptocurrency-based programs that the company claimed would deliver annualized returns exceeding 100% or more.

Issuing its own currency, called BitConnect Coins (BCC), the firm required individuals to use Bitcoin to invest in various BitConnect programs. The firm disclosed virtually nothing about its principals, financial condition, or strategies for earning profits for investors.

On January 16, 2018, Bitconnect announced it would shut down its cryptocurrency exchange and lending operation after regulators from Texas and North Carolina issued a cease and desist order against it. The decision to shut down sent the price of BCC from nearly $450 to below $1.

FinanceFeeds has recently covered the most recent revelations regarding OneCoin scammer Ruja Ignatova aka Cryptoqueen. In a lawsuit being held in London, it’s been handed evidence that in 2015, she has received 230,000 Bitcoin.

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