Securities & Exchange Commission of the US (SEC) has successfully been able to obtain a judgment in its favor and against the promoters who were involved in promoting a crypto fraud scheme under the banner of Bitconnect. The judgment was rendered and announced on 19th August in which the accused have been ordered through a decree to pay an amount of US$ 12 Million.
Before the event of the crypto Bull Run taking place in the year 2017, there was a crypto fraud scheme, which gained the public’s attention. The scheme was launched under the banner of “Bitconnect” and the promoters offered high yields against the purchase of BCC coins. The promoters were of the scheme were persons named Joshua Jeppesen and Michael Noble. Both of them launched the scheme in 2016 and enticed people by offering them high yields against their purchases.
People were made to trust the scheme which then brought huge investments to the scheme. However, the scheme started to give signals indicating it to be nothing but another Ponzi scheme developed for deceiving the public. It took time however for the people to realize that it was in fact a fraud scheme. But on one occasion Bitconnect shut down its operations in January 2018 without any notice. People, who had invested in the scheme, lost their money and the operators went into hiding along with the money.
However, it was SEC that did not allow the matter to be brushed under the carpet and initiated legal action against Bitconnect and its operator. SEC claimed that the operators of the Bitconnect scheme indulged in illegal activity by violating the security law of the US. SEC also claimed that during its business operations, Bitconnect collected revenue of US$ 2 Billion by selling unregistered products such as “securities”. The case has now been concluded finally on 13th August 2021.
A judgment in the form of a decree has been passed by a District Court in New York in favor of SEC and against both accused. The case was initiated by SEC through a lawsuit in which Bitconnect and its operators were arrayed as defendants. In the judgment announced in an open court on 13th August, the Court found the accused guilty of selling unregistered securities. The judgment declares that the judgment debtors entered into the sale of unregistered products and hence are responsible for their illegal acts.
By the order of the Court, the judgment debtors have been ordered to pay an amount of US$ 12 Million to SEC. Meanwhile, Laura Mascola, who was the relief defendant, too had been given the Court’s final verdict. Earlier, she was asked to pay US$ 3.5 Million along with 190 units of Bitcoin in the form of disgorgement. However, she obtained a stay order but in the final judgment, the stay has been vacated and final judgment passed.
The judgment marks a huge victory for the SEC.