Between early 2017 and January 2018, the SEC said, the defendants listed in the action facilitated the “sale of securities in the form of investments in a ‘Lending Program’ offered by BitConnect.” Through that program, investors deposited funds and were promised “exorbitantly high returns” through the use of alleged proprietary trading software, the SEC added.

Rather than invest clients’ money, the SEC said, “BitConnect and Kumbhani siphoned investors’ funds off for their own benefit by transferring those funds to digital wallet addresses controlled by them, their top promoter in the U.S., defendant Glenn Arcaro, and others” — promoters around the globe were allegedly rewarded through commissions that were mostly “concealed from investors.”

The SEC has charged the defendants with violating the anti-fraud and registration provisions of the federal securities laws, and is seeking injunctive relief, disgorgement…

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