Law Enforcement Lawsuit

Suspected Crypto Ponzi Scheme Bitconnect, Faces Another Lawsuit

Author – Sam Reads, United Kingdom

A new lawsuit filed against Suspected Crypto Ponzi Scheme Bitconnect with the US District Court of Northern California.

UK-based Bitconnect faces a new lawsuit, which could be the sixth or higher suit filed against the lending and exchange platform.  The platform has faced a class action and Lawsuits in a different state – Florida, Kentucky among others since it was closed in January.

From the start, Bitconnect was considered more than a Ponzi scheme from the cryptocurrency enthusiast communities. The platform promised investors a swooping 40% return every month and 1% returns per day regardless of the market outlook. Bitconnect stated that all trades would be traded by an advanced trading software to attain the promised returns.  The firm drew much criticism from the crypto-sphere with Ethereum founder Vitalik Buterin tweeting last year that “if 1%/day is what they offer then that’s a Ponzi”. The high rates associated with the lending and exchange platform triggered bells with other crypto leaders joining the Bitconnect Ponzi scheme talk.

Cease and Desist orders

On January 4, 2018, Texas’ State security Board issued an emergency Cease and desist order to Bitconnect for violating a number of the Texas Security Act, fraudulent and failure to disclose material facts about the risks associated with the investments offered.

On February 15, 2018, the Securities Division of the North Carolina issued a Temporary Cease and Desist Order to Bitconnect. The securities division found Bitconnect in violation North Carolina Securities Act. The cease and desist order barred Bitconnect from selling, offering or soliciting offers to investors in North Carolina. It also found that Bitconnect failed to disclose material statements regarding the investments.


The UK based lending and exchange platform has received a number of lawsuits since it was officially shut on 17th January but closed on 16th citing technical difficulties.

In the last week of January, the platform faced a lawsuit and a class-action one filed in Southern District Court of Florida and US District Court in Kentucky. The class-action lawsuit was filed by Brian Paige for an undisclosed amount of money for financial fraud –Ponzi scheme.  The lawsuit was later joined by over 100 members who claim to have been scammed by the platform. Paige suit alleged that the investment issued by Bitconnect should be categorized as securities and since they were not registered any proceeds from commissions is illegal. Cryptocurrency fraud specialist Silver Miller Law represented plaintiffs, in Florida. The lawsuit is based on several criminal and civil violations by BitConnect.

Author: Author : Mike

A avid crypto expert. Freelancer, editor and manage part time content at Working at since Dec 2017.

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A avid crypto expert. Freelancer, editor and manage part time content at Working at since Dec 2017.
A avid crypto expert. Freelancer, editor and manage part time content at Working at since Dec 2017.

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