Bitconnect Scammers Ordered to Pay Over $12M in Penalties

Jafrin  |  Aug 21, 2021

The U.S. Securities and Exchange Commission (SEC) has reached a settlement against the promoters of the Bitconnect Ponzi scheme for over $12 million.

SEC Wins $12 Million Against Bitconnect Representatives

On Thursday, the U.S. Securities and Exchange Commission (SEC) reached a judgment against Michael Noble (aka Michael Crypto) and a final judgment against Joshua Jeppesen and Laura Mascola for over $12 million for promoting the fraudulent BitConnect Ponzi schemes.

The defendants must now collectively pay 190 Bitcoin and more than $3.5 million in cash, per the order of the U.S. District Court for the Southern District of New York.

Jeppesen being the liaison between BitConnect and promoters is responsible for the bulk of the settlement, including the 190 Bitcoin and about $3.04 million. He is also to provide the information and access to the Bitcoin wallet and pay an additional penalty of $150,000.

While Mascola is ordered to pay over $576,000 in disgorgement and prejudgment interest, Noble’s penalty amount is yet to be finalized. Under the judgment, both Noble and Jeppesen are prohibited from participating in future digital asset offerings, either directly or indirectly.

The investigation still continues against fellow defendants Trevon Brown, Craig Grant, and Ryan Maasen, however, they were not included in this settlement.

The Biggest Scam in Crypto World

Bitconnect operated just before the 2017 crypto bull run that allegedly used a network of promoters to sell $2 billion worth of unregistered securities. Promoters received commissions, similar to multilevel marketing contractors for recruiting investors.

The platform showed signs of a Ponzi scheme and had to shut down following cease and desist orders from regulators in both Texas and North Carolina in January 2018.

In its May complaint, the SEC alleged that Jeppeson reportedly received compensation worth more than $2.6 million from the BitConnect Ponzi scheme, of which he transferred more than $500,000 to his fiancé Mascola. Meanwhile, Noble received compensation of at least $480,000.

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