The US financial markets regulator, the Securities and Exchange Commission (SEC), is preparing to settle its charges with promoters of BitConnect, which is a multi-billion dollar crypto Ponzi scheme.
According to a Law360 report, the regulator has already made up its mind to settle with the six perpetrators and the terms of settlements are currently pending approval by Judge John Koeltl.
The SEC brought charges against the six BitConnect promoters in May that include Trevon Brown (a.k.a. Trevon James), Craig Grant, Ryan Maasen and Michael Noble (a.k.a. Michael Crypto). They were involved in offering and selling BitConnect products without any authorization and created bogus testimonial-style videos and published them on YouTube.
The action against the promoters followed two cease and desist orders against BitConnect issued by the state regulators in Texas and North Carolina in 2018.
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Though the Judge wants minor fixes on the settlement terms for making them ‘scrupulously accurate’, the regulator wants more than $3 million in fines from Heppensen of Massachusetts, another $576,000 from his fiancee Mascola, $526,000 from Maasen of Oklahoma, and an unspecified sum from California’s Noble.
A Classic Ponzi Scheme
BitConnect promised massive returns to its investors but turned out to be a Ponzi investment scheme that allegedly scammed investors out of $US2.6 billion. The scheme gained traction in 2017 with the boom in the crypto market and bottomed out in early 2018.
Maasen was the national promoter of the fraudulent scheme in the United States, while the others acted as regional promoters in various states. However, two other regional promoters, Trevon Brown of South Carolina and Craig Grant of Florida did not agree to any settlement offer made by the SEC.
Earlier, the Australian financial market regulator banned John Bigatton, who represented the scheme in the country and charged him with several counts of financial crimes.