SEC Sues BitConnect Promoters Over $2 Billion Token Sale

The US Securities and Exchange Commission (SEC) today hit promoters of one of the biggest alleged crypto scams in history with a lawsuit. 

Five people allegedly involved in BitConnect, a supposed cryptocurrency-investment program, were on Friday charged with promoting a global unregistered digital asset securities offering. 

The program, the SEC said, raised over $2 billion from retail investors by using a network of promoters. 

“We allege that these defendants unlawfully sold unregistered digital asset securities by actively promoting the BitConnect lending program to retail investors,” Lara Shalov Mehraban, Associate Regional Director of SEC’s New York Regional Office, said in a statement. “We will seek to hold accountable those who illegally profit by capitalizing on the public’s interest in digital assets.”

Trevon Brown (aka Trevon James), Craig Grant, Ryan Maasen, and Michael Noble (aka Michael Crypto), are the alleged promoters the SEC has targeted. Another defendant, Joshua Jeppesen, who allegedly served as a liaison between BitConnect and promoters and represented BitConnect at conferences and promotional events, was also named by the SEC. 

BitConnect was considered to be a Ponzi scheme when it launched in 2017. It used a pyramid with separate levels to explain how it worked and rewarded investors based on the number of people they brought into the program. Its own token, BCC, was one of the 20 most valuable coins at the time and had a market cap of over $2.6 billion. 

BitConnect promised average daily returns of one percent—the ability to turn $1,000 into $36,000 in one year.

It collapsed in 2018 when regulators caught onto the project and forced the platform to close. Investors got their BCC, but by that point the coin had collapsed from its all-time high of around $500 to less than $1.


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Bearish signals grow as Bitcoin price drops to $35K and traders ignore the dip

The cryptocurrency market faced a new wave of selling pressure on May 28 as Bitcoin (BTC) price dropped to $35,100 and traders seem generally disinterested in buy the dip ahead of the weekend.

Despite the downside moves seen across the market over the past couple 2 weeks, institutional investors have for the most part held firm in their resolve to stay committed to cryptocurrencies but the absence of ‘we bought the dip’ announcements have retail traders wondering if Bitcoin price is in for further downside.

BTC/USDT 4-hour chart. Source: TradingView

While some analysts see the possibility of Bitcoin falling as low as $20,000 as the worst case scenario, the overall price trajectory of BTC remains skewed to the upside with the weekly trend of higher lows still intact.

Altcoins take a tumble alongside Bitcoin

Altcoins also pulled back sharply on Friday as market uncertainty ahead of the Memorial Day weekend led to a low volume and the current risk-averse environment diminished the impact of significant announcements like Polygon (MATIC) integrating its datasets into Google Cloud technology.

Despite the market-wide pullback, there were a few tokens that managed to rally. Helium (HNT) surged 28% to a new all-time high at $23.01 following a tweet announcing that the project had surpassed 45,000 active hotspots worldwide that provide decentralized wireless coverage for internet of things (IoT) devices.

MaidSafeCoin (MAID) also saw a 20% rally to hit an intraday high at $0.52 after the launch of its v2 testnet and Zcash (ZEC) gained 5% and now trades at $159.

Daily cryptocurrency market performance. Source: Coin360

The overall cryptocurrency market cap now stands at $1.567 trillion and Bitcoin’s dominance rate is 42.8%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.