A newly consolidated lawsuit has been filed against BitConnect, several months after several cases have been brought forth against the company’s alleged fraudulent pyramid scheme at the beginning of 2018. BitConnect has been considered as the crypto sector’s biggest scam to date, following its false promotions and offering unregulated securities in connection with its initial coin offering (ICO).
Aggrieved by the loss of value in their crypto holdings, BitConnect investors rushed to court to seek redress. They sought to be indemnified by the now defunct startup, while looking to securities laws to support their allegations of fraud.
Last week, a new consolidated class action complaint has been filed in the U.S. District Court for the Southern District of Florida, CoinDesk reported. David Miller, of the Silver Miller law firm, told the news outlet that the new lawsuit not only consolidated the previous cases, but also named more BitConnect owners and promoters—Divyesh Darji and Trevon James—who weren’t included in the earlier lawsuits.
As reported by Coingeek in July, YouTube was also added to the suit for their ncegligence in promoting the fraudulent corporation. Google-owned YouTube was charged with negligence in connection with its alleged failure to protect or warn its users that BitConnect was a scam. The video streaming site reportedly published more than 70,000 hours of promotional videos, which were viewed more than 58 million times. According to documents filed in the Southern District Court of Florida, Google-owned YouTube ‘was aware or ought to have been aware that BCC promoters were using the channel to promote and lure unsuspecting investors in the U.S. and abroad into the fraudulent Ponzi scheme.
Following further lifting of Bitconnect’s corporate veil, a new lawsuit has been consolidated to include its Indian Head- Divyesh Darji and promoter Trevon James. They have been specifically named for the first time in the ongoing suits against the corporation. They are accused of launching an illegal pyramid scheme to swindle investors while passing it off as another crypto-startup.
Others named in the consolidated suit filed last Thursday in the U.S. District Court for the Southern District of Florida include: BitcConnect Public Limited, BitConnect International PLC, BitConnect Ltd, BitConnect Trading Ltd., and close to 40 people affiliated with the Ponzi scheme. The new lawsuit cites 22 various legal violations by the company.
The company has since been dissolved through court action after cease and desist orders were issued against it in Texas and North Carolina.
The suit seeks restitution and compensatory damages for victims. Silver Miller law firm has been appointed as the class action attorneys and David Miller as the lead counsel in the company’s defense.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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The North Dakota (ND) Securities Department issued cease-and-desist orders against three groups launching initial coin offerings (ICOs) in the state, including the infamous BitConnect, according to a press release.
The regulatory action is part of the continent-wide Operation Cryptosweep, that seeks to shut down cryptocurrency-related scams. “The expanding exploitation of the cryptocurrency ecosystem by financial criminals is a significant threat to Main Street investors,” ND Commissioner Karen Tyler said, adding that “financial criminals are cashing in on the hype and excitement around blockchain, crypto assets, and ICOs – investors should be exceedingly cautious when considering a related investment.”
According to the North Dakota regulator, the most common securities violations for ICOs were failure to register tokens and coins offered to the public, failure to register as a sales agent, and outright fraud.
BitConnect and related companies BitConnect LTD and BitConnect International PLC have also been served cease-and-desist orders in other states, namely Colorado, North Carolina and Texas. “BitConnect is not registered in North Dakota to offer securities and BitConnect’s claim of excessive interest rates is unsubstantiated and misleading,” the regulator said, in reference to the 120% returns promised to investors.
Magma, along with Magma Foundation and Magma Coin, which is selling a token named ‘MGM’ is supposedly “backed by gold and/or ETFs,” and was said to have false information on their website, “including images of people represented to be the Magma Foundation executive team, which in fact are not related to Magma and are assigned fake names.”
The third group, Pension Rewards Platform, was criticized by the agency for not disclosing “material financial and risk information to potential investors, nor do they describe the means by which they will provide the promised return on investments.”
The ND Securities Department said that a “red flag” of fraudulent ICOs was “plagiarized white papers containing spelling and translation errors, fictitious executive teams represented by stock internet photos, fake business addresses and phone numbers, fake celebrity endorsements, the promise of no risk and high returns, false claims about securities law compliance, and the promise of additional ICO tokens for promoting the deal and bringing in other investors.”
BitConnect shut down its exchange last January, the price of its cryptocurrency falling from a peak of over $400 a coin to a few cents today, in the few exchanges still trading it. The firm’s assets in the US have been frozen, and its executives are being hunted by the authorities. Divyesh Darji, who reportedly headed BitConnect India, was arrested in August.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
The post BitConnect, 2 more ICO promoters shut down in North Dakota appeared first on Coingeek.
