SEC Readies to Settle with BitConnect Promoters - Judge
The US Securities and Exchange Commission (SEC) is expected to settle with the promoters of the infamous BitConnect exchange who had helped the platform raise more than USD 2bn through their YouTube videos.
US Judge John G. Koeltl has announced he would likely sign off in the coming days on judgments against four of the six defendants, as reported by legal news site Law360.com.
The SEC filed lawsuits against the six individuals last May, accusing them of taking millions in commissions and pay to promote BitConnect’s unregistered securities before the exchange was shut down in January 2018. One of the individuals had allegedly earned more than USD 2.6m in commissions for their recruitment and promotional efforts.
The judge said the settlement agreements were legally sound, but that they required minor amendments to make them “scrupulously accurate.”
The UK-based platform drew the ire of Texas and North Carolina regulators due to a program launched to attract crypto borrowers by daily returns “with no risk” by pledging bitcoin (BTC) to borrow and trade the exchange’s own token, BitConnect Coin.
BitConnect told participants at that time that it was closing the lending program, following which investors recruited by the six defendants failed to withdraw their money from the platform, all the while the value of their tokens dropped by 92%, according to the SEC.
Among others, BitConnect’s national promoter Joshua Jeppesen of Massachusetts is reportedly set to pay more than USD 3m to settle, while his fiancée, relief defendant Laura Mascola, is expected to pay back the USD 576,000 she received from Jeppesen. Another defendant, regional promoter Ryan Maasen of Oklahoma, is to pay some USD 526,000 to settle.
A fourth defendant, regional promoter Michael Noble of California, told Judge Koeltl that he was “very cooperative” with the SEC and the US Department of Justice, but he has “locked horns” with the regulator over how much money he would have to pay to settle.