Well it's been 3+ years since the falling out of BitConnect, I wasn't even interested in crypto at the time but it's so legendary that you can't skip over news like this. The founder, Satish Kumbhani, and the lead national promoter, Glen Arcaro, as well as the company he founded to lure people into investing, Future Money LTD, have all been sued by the SEC.
The press release detailing the lawsuit and it's aim addressed BitConnect as:
A global fraudulent and unregistered offering of investments into a program involving digital assets.
This entire process took so long due to the size of the scam itself and the necessity of all the proper information being collected so that people could get justice. Though it is unclear as to whether or not victims of the scheme will be reimbursed through the intended fines. Such as the $3.5 million and 190 BTC fines that Michael Noble and Joshua Jeppesen, two more promoters, are being charged with. There are also 3 other promoters that have been separately sued due to their connections to BItConnect.
The promoters are specifically being sued for "fraudulent receival of referral commissions".
The details of the incident are widely known so I won't go into detail about that, but I am curious if there was ever an actual exit plan devised by these people after they had tricked so many people. Was it just the fact that they didn't expect it to blow up and therefore the media coverage and general size of the scam became so large that they couldn't escape even if they wanted to? I really can't say but I've always wondered how these people expected this idea to end...same with every other Ponzi.
This lawsuit coincides with the Ripple one and somewhat emphasizes the SEC's reasoning for wanting to regulate crypto as there are ways to get scammed, as there are in any business. It's also a nice reminder to research the thing you're investing in and to never trust impossible numbers and returns... cause if they seem impossible, that's cause they are.
Thanks for reading and stay sharp!
