The U.S. Securities and Exchange Commission (SEC) has filed an action against five individuals alleging the promotion of a global unregistered digital asset securities offering raising $2 billion from retail investors.
Authorities noted the complaint filed in the U.S. District Court for the Southern District of New York, detailed from approximately January 2017 to January 2018, BitConnect used a network of promoters, including U.S.-based Trevon Brown, Craig Grant, Ryan Maasen, and Michael Noble, to market and sell securities in its lending program.
The SEC alleged via its complaint the promoters offered and sold the securities without registering the securities offering with the Commission and without being registered as broker-dealers with the Commission, which authorities noted is required by federal securities laws.
“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 the SEC’s New York Regional Office, said. “We will seek to hold accountable those who illegally profit by capitalizing on the public’s interest in digital assets.”
The SEC alleged the promoters advertised the merits of investing in BitConnect’s lending program to prospective investors by creating testimonial-style videos and publishing the content via YouTube, indicating the promoters received commissions based on their success in soliciting investor funds.
Additionally, the SEC complaint alleges Joshua Jeppesen served as a liaison between BitConnect and promoters – representing BitConnect at conferences and promotional events.