According to a lawsuit filed on Wednesday, the US markets watchdog accused an online cryptocurrency lending firm and its top executives of soliciting investments fraudulently to the tune of US$2 billion (RM8.32 billion. The founder of Bitconnect Satish Kumbhani and Glen Arcaro its’s top US promoter and his company has been charged by the Securities and Exchange Commission with offering “a fraudulent and unregistered offering and sale of securities in the form of investments in a ‘Lending Program,'” an SEC statement said.  A complaint says the defendants claimed their “proprietary volatility software trading bot” would “generate exorbitant returns” on investors’ money.

However, the SEC has accused the defendants of siphoning off investors’ funds and transferring them to digital wallets they controlled. The SEC alleged BitConnect and Kumbhani, an Indian national, created a network of promoters who were paid on commission, “a substantial portion of which they concealed from investors.”

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A leading promoter of the lending program in the united states names Arcaro is accused to of establishing the firm Future Money to “lure investors.” Lara Shalov Mehraban, the associate regional director of SEC’s New York office, said “We allege that these defendants stole billions of dollars from retail investors around the world by exploiting their interest in digital assets,”.

The defendants are accused of violating antifraud and registration laws, and could be subject to “injunctive relief, disgorgement plus interest, and civil penalties.” In May a civil suit was filed by The Securities and Exchange Commission (SEC) against five other BitConnect promoters and it has been settled with two of the defendants. In addition, Arcaro on Wednesday Upon being charged with criminal charges in a parallel suit, pleaded guilty, according to the US Justice Department.