Top US securities regulator has sued the founder of the now-defunct cryptocurrency exchange platform Bitconnect for allegedly defrauding nearly 2 2 billion (approximately Rs 14,600 crore) from thousands of retail investors.
The American Commodities and Securities Exchange Commission (SEC) has filed a lawsuit against Robert A. Jain, founder of the cryptocurrency exchange platform Bitconnect, for allegedly embezzling billions of dollars through the Ponzi scheme. The regulator said Jain and his alleged accomplices had taken Rs 2.1 billion (approximately Rs 14,600 crore) from investors to promote Bitconnect and create value for the platform coin BCN.
In a lawsuit filed in federal court in Fort Worth, Texas, the SEC alleges that Jain and his companies sold fraudulent "BitConnect Coin" (BCN) tokens that were intended to serve as payment for financial services. The lawsuit also alleges that Jain and his company violated federal securities laws, including the registration and anti-fraud provisions, and the Florida Blue Sky Act. Jain and his companies were also accused of lying to investors about investment plans.
"Defendants sold unregistered securities, collected more than $ 700 million from investors by making false and misleading statements, and concealed the fact that these sales violated federal securities laws," said Stephanie Avakian, co-director of SEC enforcement. "Jain and his companies, by offering unregistered securities, failed to declare that they were offering 'Bitconnect Coin' tokens containing securities under federal securities law."
The SEC's complaint alleges that defendant Jain and his companies sold more than $ 700 million of registered securities in violation of federal securities laws. In particular, Jain and his companies sold more than $ 700 million in unregistered securities to more than 2,000 investors in the United States and around the world.
In addition, the SEC alleges that Jain misrepresented the terms of his investment agreement and did not fully disclose the interests and conflicts he posed.
In addition to other concessions, Jains and companies are jointly and in many ways liable for prejudice interest with non-profit profits.
The SEC seeks to bar Jain and other aid defendants from permanently acting as directors or officers of any public company, and seeks an injunction restraining Jain and aid defendants from acting as officers or directors of any public company. The SEC is seeking a combined penalty against Jain and about 30 30 million and against predecessor interest.
In parallel criminal proceedings, Jain was charged in U.S. District Court for the Southern District of Florida with felony criminal mischief, on Sept. 4, including one count of conspiracy to commit fraud and one count of securities fraud. Jain pleaded not guilty in both cases. The lawsuit is pending.
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