In a press release issued by the agency, the regulatory authority called BitConnect “a global fraudulent and unregistered offering of investments into a program involving digital assets.”
Khumbhani was the top U.S. promoter of the company, which eventually saw over $2 billion in total taken from investors via a program that BitConnect purported would offer high returns.
The SEC is accusing Khumbhani and others of siphoning investors’ funds to digital wallets for their own benefit. The finance watchdog went on to state that it was a large collective exploit as BitConnect established a large network of promoters around the world.
Lara Shalov Mehraban, Associate Regional Director of SEC’s New York Regional Office, said,
The market was been heavily affected by the incident, and it has encouraged due diligence on the part of exchanges and investors. However, it has not stopped cryptocurrency scams from occurring.
BTC PEERS reported that decentralized e-commerce platform Bondly Finance allegedly pulled an exit scam sometime in July.
Due to incidents like this, regulators are proceeding to make investor protection a high priority.
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Source: Cryptocurrency - investing.com
