The United States Securities and Exchange Commission (SEC) has taken legal action against five individuals promoting the defunct cryptocurrency exchange BitConnect. 

Reports indicate that the federal regulator has sued on the allegations that the defendants helped market and sell securities without registering them with the SEC. Their promotional activities raised more than $2 billion from retail investors.

More specifically, the SEC alleges that the promoters advertised BitConnect’s “lending program” between Jan. 2017 and Jan. 2018 by posting a series of YouTube testimonials. On occasion, they posted the testimonial videos multiple times a day. The promoters were subsequently paid commission for whatever investor cash they could attract. Reports state that one of the accused earned over $2.6 million.

The SEC shared a press release on their Twitter account on May 28. The release listed their allegations in great detail, alongside the names of the accused.

Lara Shalov Mehraban, Associate Regional Director of SEC’s New York Regional Office, was quoted to say:

“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 has charged four of the individuals with violating the registration provisions of the federal securities laws. Meanwhile, the Commission’s complaint charged the fifth man with aiding and abetting BitConnect’s unregistered offer and sale of securities.

BitConnect stopped operating as an exchange in 2018 amid fraud allegations.

The Commission also remains locked in an ongoing legal tug-of-war with Ripple Labs. They have alleged that the company CEO Brad Garlinghouse and co-founder Christian Larsen conducted an illegal securities offering.

On May 21, reports stated that the SEC had won the right to access to further discovery information from Ripple’s overseas regulators. This was the result of an issue that began back in April, when Ripple submitted a letter to Judge Sarah Netburn, requesting she stop the SEC from trying to acquire this information. The letter asserted the SEC was contacting their foreign regulators as an intimidation tactic.

However, Judge Netburn ultimately ruled in the SEC’s favor. She stated there was no evidence to suggest “that the SEC issued its Requests in bad faith.”

More recent developments in SEC vs. Ripple concern the defendants’ request to seal exhibits. On May 28, former federal prosecutor James K. Filan tweeted that the SEC had filed an opposition to that request. Mr Filan, who has commentated on the suit regularly on Twitter, said the SEC noted the great deal of public interest in the case. He also referred to the numbers of attendees at telephonic discovery conferences on April 6 and April 30.

Mr Filan followed up with another tweet shortly afterwards, regarding Ripple’s opposition to the SEC’s motion for another discovery conference.

“SEC also just filed a response to Ripple’s Opposition to the SEC’s motion for a discovery conference,” the tweet read. “Like the SEC’s original motion, the response was filed under seal, so we won’t know what this is about until the sealing issue is decided.”

The post Five BitConnect Promoters Sued for Marketing and Selling Unregistered Securities appeared first on BeInCrypto.

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