The U.S. Securities and Exchange Commission (SEC) is close to agreeing on a settlement with the promoters of the BitConnect crypto Ponzi scheme.
The filing noted that the settlement is only awaiting approval from Judge John Koeltl, who stated that the agreement terms are currently in order. However, it needs to undergo minor fixes to make sure they remain “scrupulously accurate.”
The defendants promoted a fake and unregistered platform
The Six individuals were fined by the SEC in May last year, accusing them of promoting BitConnect’s unregistered securities while making millions via commissions. The unregistered exchange was closed in January 2018.
According to the report, one of the accused persons has collected millions in commissions for the efforts in promoting the defunct scheme.
The UK-based platform entered the wrong books of North Carolina and Texas regulators when they rolled out a program to lure crypto borrowers by daily returns. The main issue is the fact that the promoters deceived investors, saying the investment has “no risk” They allowed the users to pledge Bitcoin to borrow and trade the exchange’s token.
At that time, Bitcoin told the participants that the program will be closed. But before they could act, the value of the token had shed almost 92%.
The defendants to pay hefty fines
While the judge is looking at smaller amounts of settlement fees from the violators, the regulator wants them to pay hefty fines.
Based on the settlement, Joshua Jeppesen, who is Bitcoonnect’s national promoter, is reportedly going to pay over $3 million as settlement. This will be the highest any of the defendants are expected to pay. Relief defendant Laura Mascola will pay $576,000 she received from Jeppesen, her fiancé.
The third defendant, Ryan Maasen, BitConnect’s regional promoter, will be paying $526,000 for the settlement.
Another defendant, Michael Noble of California, stated in the hearing that he has been “very cooperative” with the US Department of Justice and the SEC. However, he has been in disagreement with the regulators regarding the amount of money has to pay.
The defendants were also charged for creating fake testimonial-style videos and publishing them on YouTube.
The fake investment scheme allegedly scammed investors of about $2.6 billion. The Scheme gained reception in 2017 during the crypto market boom, which saw the surge of Bitcoin and other cryptocurrencies.