BitConnect securites fraud cease and desist issued in North Dakota
Having evidently taken their sweet time about it, the North Dakota Securities Division issued BitConnect a cease and desist on September 19th.
As with similar notices issued in Texas and North Carolina, North Dakota claims BitConnect was engaged in securities fraud.
Cited as respondents in North Dakota’s notice are BitConnect LTD, BitConnect International PLC and ‘their officers, directors, agents (and) employees‘.
In addition to securities fraud, North Dakota also points out BitConnect’s lack of disclosure to investors.
BitConnect willfully fail to disclose material facts when offering the BitConnect investments, including the following:
a. the identity of the principals of BitConnect and the actual location of its operations and management;
b. information about the assets and liabilities of BitConnect and any other information describing the means by which BitConnect will provide investors with the promised return on investments;
c. information about the proprietary, secret trading system that it calls its “volatility software”, details of its trading records and historical performance, proof of its existence, and the risk factors associated with its use; and
d. that the investments offered by BitConnect are securities and not properly registered as such with state and federal regulators.
Whereas North Dakota’s BitConnect cease and desist is somewhat pointless this late after the fact, authorities in India and the US appear to have dismantled, or are in the process of dismantling, the multi-billion dollar Ponzi scheme.
Indian authorities believe they’ve identified two Indians as the founders of BitConnect. The Ponzi scheme was initially launched in India to launder “black money”, from whence it spread globally.
Stateside US authorities have pegged BitConnect investor losses at over $5 billion. Ongoing SEC and FBI investigations are underway.