The US Securities and Exchange Commission (SEC) has settled charges against three BitConnect promoters for a collective payout of $3.5 million and an additional 190 Bitcoins in disgorgement and prejudgment interest.
Announced on Thursday, the securities market regulator already entered a judgment against Michael Noble (aka Michael Crypto) and a final judgment against Joshua Jeppesen and Laura Mascola. All of them were charged for promoting the fraudulent BitConnect lending schemes.
A Billion-Dollar Crypto Fraud
BitConnect promised massive returns to its investors but turned out to be a Ponzi investment scheme that was estimated to have scammed investors out of $2.6 billion. The scheme gained traction in 2017 with the boom in the crypto market and bottomed out in early 2018. Apart from the US, other countries are busting people linked to that massive crypto fraud.
The US agency first brought charges against Noble and a few others earlier in May, alleging that they promoted the fraudulent crypto scheme between June 2017 and January 2018. Nobel allegedly violated the securities law by offering and selling unregistered securities without a broker-dealer license.
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On the other hand, Jeppesen was a liaison between BitConnect and promoters, representing the fraudulent scheme at conferences and promotional events, while Mascola only received ‘certain proceeds’ from Jeppesen’s activities.
While Noble was charged for violating the registration provisions of the federal securities laws, Jeppesen was booked for aiding and abetting BitConnect’s unregistered offer and sale of securities. However, Mascola only faced unjust enrichment charges.
Though none of them admitted or denied the charges, all agreed to the judgment. Under the orders, Jeppesen has to pay almost $3.04 million in disgorgement and prejudgment interest, 190 Bitcoin in disgorgement, and a penalty of $150,000. Mascola has been ordered to pay $576,358 in disgorgement and prejudgment interest, while the proceeds to be collected from Noble will be decided in a later motion.