The U.S. Securities and Exchange Commission has sued the founder of BitConnect a well-known bitcoin Ponzi scheme that operated between 2016 and 2018, according to a new legal filing.
BitConnect founder Satish Kumbhani, an Indian citizen whose current location is unknown, is the target of today’s SEC filing. It also goes after BitConnect promoter Glenn Arcano, a Californian who is a US citizen.
The plan was described as a “fraudulent organization” that “ultimately succeeded in acquiring more than 325,000 Bitcoin, or nearly $2 billion, from investors worldwide,” according to the lawsuit. If the allegations are successful, it is unclear what penalties the operator and promoter may face.
The SEC had already sued five BitConnect promoters in May, but that lawsuit did not include the company’s founder.
The SEC continues to regulate the crypto industry
The SEC is expanding its regulatory authority over the crypto sector, according to today’s report. Gary Gensler, the chairman of the Securities and Exchange Commission, has recently stated that the agency wants to regulate DeFi platforms and has urged for increased regulation of crypto in general.
In recent months, the SEC has reached agreements with numerous other crypto companies, including Poloniex, Coinschedule, Loci, and LBRY.
In addition, the SEC is now involved in a legal battle with XRP issuer Ripple, which is attempting to defeat the regulator in court.
The charges leveled against those individuals range from brazen fraud to unregistered securities activities.
