The SEC has managed to apprehend and charge five individuals for promoting an offering that specializes in digital assets securities that had also been unregistered globally.
Nearly three years later, members of the cryptocurrency community, as well as the mainstream audience, will never forget the Bitconnect debacle. Bitconnect was eventually revealed to be a Ponzi scheme and one of the most famous scams in the history of the cryptocurrency industry. What had transpired was that Bitconnect had gone from being relatively obscure back in 2016 when its price had been about $0.17 to a ridiculous high of $436 just a year later in 2017. It had a lot of potentials, with it even managing to enter the list of top 20 tokens worldwide. However, this was not to last as it was revealed that Bitconnect was a scam, and the price had crashed down shortly afterward to $0.40. Bitconnect then shut its doors in 2018 following continuous crackdowns from various regulators.
SEC moves in
As per the SEC’s official complaint, it had been stated that the promoters in question had, in fact, offered and subsequently sold the aforementioned securities without the approval of any kind of registration from the commission. Furthermore, the promoters had not registered themselves as broker-dealers either, a process that is mandatory under the laws pertaining to federal securities.
Craig Grant, Michael Noble, Ryan Maasen, and Trevon Brown had been named as the ones to have promoted Bitconnect and the various merits associated with investing in it. They had additionally created videos in the style of ‘testimonials’ and had then published them via YouTube. In exchange for these efforts, the promoters were then paid accordingly on the basis of commissions. Joshua Jeppesen had also been named as the one acting as a liaison of sorts between the promoters and Bitconnect itself.
Bitconnect case could become a blueprint for SEC
While it is certainly true that Bitconnect was indeed doomed from the start due to its fraudulent nature and questionable status, there are those that believe that the SEC may utilize this case to form a blueprint of sorts to be used against various other decentralized autonomous organizations (DAOs).
Gabriel Shapiro is just one of the many individuals that have speculated on the potential ramifications of the Bitconnect case for the long run. He had stated that although the SEC has its sights set on Bitconnect now, we should not be surprised if the commission uses this as a blueprint to target other DAOs in the near future.