This case was last updated from PACER on 09/03/2021 at 12:26:21 (UTC).

Securities and Exchange Commission v. BitConnect et al

Case Summary

On September 1, 2021, the Securities and Exchange Commission (“SEC”), represented by Richard G. Primoff and Richard R. Best, attorneys at the SEC’s New York regional office, filed a civil enforcement action against BitConnect (“BitConnect”), Satish Kumbhani (“Kumbhani”), Glenn Arcaro (“Arcaro”), and Future Money Ltd. (“Future Money”) (collectively, “Defendants”), seeking injunctive relief, disgorgement of all ill gotten gains together with civil monetary penalties for allegedly conducting fraudulent and unregistered offering and sale of securities in the form of investments in BitConnect’s purported “Lending Program,”. This case was filed in U.S District Court in the Southern District of New York. 

 

In its complaint, the SEC alleged that, “From approximately January 2017 to January 2018 (the “relevant period”), Defendants conducted a fraudulent and unregistered offering and sale of securities in the form of investments in BitConnect’s purported “Lending Program,” that ultimately succeeded in obtaining more than 325,000 Bitcoin, or approximately $2 billion, from investors worldwide, including from investors located in the United States.”

 

The SEC further alleged that, “BitConnect, an unincorporated organization, and Kumbhani, its founder, established a worldwide network of promoters, and rewarded them for their promotional efforts by paying them commissions, a substantial portion of which they concealed from investors. Among these promoters was Arcaro, whom Kumbhani and BitConnect engaged as the lead national promoter of BitConnect for the United States, and who used the website he created for his company, Future Money, to lure investors into the Lending Program.”

 

The SEC also alleged that, “To induce investors to deposit funds into the purported Lending Program, BitConnect and Kumbhani represented, among other things, that BitConnect would deploy a purported proprietary “volatility software trading bot” (the “Trading Bot”) that, they claimed, would use investor funds to generate returns as high as 40% per month, and they posted fictitious returns on the BitConnect Website that amounted to, on average, 1% per day, or approximately 3,700% on an annualized basis.”

 

The SEC even further alleged that, “To mask the fact that they were not deploying investor funds to be traded with the purported Trading Bot they described to investors, BitConnect and Kumbhani conducted a Ponzi-like scheme in which they at times used funds deposited by newer investors in order to satisfy withdrawal demands made by earlier investors.”

 

The SEC has laid down five claims for relief, the first claim is against all Defendants for alleged Violations of Exchange Act Section 10(b) and Rule 10b-5, the second claim is against BitConnect, Kumbhani and Arcaro for alleged Violations of Securities Act Section 17(a), the third claim is against Future Money for alleged Violations of Securities Act Section 17(a)(1) and (3), the fourth claim is against all Defendants for alleged Violations Securities Act Sections 5(a) and (c) and the last claim is against Arcaro and Future Money for alleged Violations of Exchange Act Section 15(a). 

 

In its prayer for relief, the SEC requested that the Court permanently enjoin Defendants from violating the alleged provisions; permanently enjoin Arcaro and Future Money from violating the alleged provisions; permanently prohibit Future Money from offering, operating, or participating in any marketing or sales program in which the participant is compensated; order Defendants to disgorge all ill-gotten gains and/or unjust enrichment they received directly or indirectly, with pre-judgment interest thereon; and order Defendants to pay civil monetary penalties. 

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    1:21-CV-07349

  • Filing Date:

    09/01/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

  • Courthouse:

    New York Southern District

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendants

BitConnect

Satish Kumbhani

Glenn Arcaro

Future Money Ltd.

Attorney/Law Firm Details

Plaintiff Attorneys

Richard R. Best

Attorney at U.S. Securities and Exchange Commission

200 Vesey Street, Ste 400

New York, NY 10281

Richard G Primoff

Attorney at U.S. Securities & Exchange Commission

3 World Financial Center

New York, NY 10281

 

Court Documents

#8

(#8) REQUEST FOR ISSUANCE OF SUMMONS as to Glenn Arcaro, re: #1 Complaint. Document filed by Securities and Exchange Commission..(Primoff, Richard) (Entered: 09/02/2021)

#7

(#7) ELECTRONIC SUMMONS ISSUED as to Future Money Ltd.. (vf) (Entered: 09/02/2021)

#6

(#6) REQUEST FOR ISSUANCE OF SUMMONS as to Future Money Ltd., re: #1 Complaint. Document filed by Securities and Exchange Commission..(Primoff, Richard) (Entered: 09/01/2021)

#5

(#5) FILING ERROR - DEFICIENT- SUMMONS REQUEST - REQUEST FOR ISSUANCE OF SUMMONS as to Glenn Arcaro, re: #1 Complaint. Document filed by Securities and Exchange Commission..(Primoff, Richard) Modified on 9/2/2021 (vf). (Entered: 09/01/2021)

#4

(#4) NOTICE OF APPEARANCE by Richard G Primoff on behalf of Securities and Exchange Commission..(Primoff, Richard) (Entered: 09/01/2021)

#3

(#3) RELATED CASE AFFIRMATION of Richard R. Best re: that this action be filed as related to 21-4791. Document filed by Securities and Exchange Commission..(Best, Richard) (Entered: 09/01/2021)

#2

(#2) CIVIL COVER SHEET filed..(Best, Richard) (Entered: 09/01/2021)

#1

(#1) COMPLAINT against Glenn Arcaro, BitConnect, Future Money Ltd., Satish Kumbhani. Document filed by Securities and Exchange Commission..(Best, Richard) (Entered: 09/01/2021)

 

Docket Entries

  • 09/02/2021
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  • Docket(#8) REQUEST FOR ISSUANCE OF SUMMONS as to Glenn Arcaro, re: #1 Complaint. Document filed by Securities and Exchange Commission..(Primoff, Richard) (Entered: 09/02/2021)

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  • 09/02/2021
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  • Docket***NOTICE TO ATTORNEY REGARDING DEFICIENT REQUEST FOR ISSUANCE OF SUMMONS. Notice to Attorney Richard G Primoff to RE-FILE Document No. #5 Request for Issuance of Summons. The filing is deficient for the following reason(s): defendant party name error; party name must correspond to pleading caption. Re-file the document using the event type Request for Issuance of Summons found under the event list Service of Process - select the correct filer/filers - and attach the correct summons form PDF. (vf) (Entered: 09/02/2021)

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  • 09/02/2021
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  • Docket(#7) ELECTRONIC SUMMONS ISSUED as to Future Money Ltd.. (vf) (Entered: 09/02/2021)

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  • 09/02/2021
  • DocketCASE REFERRED TO Judge John G. Koeltl as possibly related to 1:21cv4791. (vf) (Entered: 09/02/2021)

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  • 09/02/2021
  • DocketCase Designated ECF. (vf) (Entered: 09/02/2021)

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  • 09/02/2021
  • DocketCASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge Unassigned. (vf) (Entered: 09/02/2021)

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  • 09/01/2021
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  • Docket(#6) REQUEST FOR ISSUANCE OF SUMMONS as to Future Money Ltd., re: #1 Complaint. Document filed by Securities and Exchange Commission..(Primoff, Richard) (Entered: 09/01/2021)

    Read MoreRead Less
  • 09/01/2021
  • View Court Documents
  • Docket(#5) FILING ERROR - DEFICIENT- SUMMONS REQUEST - REQUEST FOR ISSUANCE OF SUMMONS as to Glenn Arcaro, re: #1 Complaint. Document filed by Securities and Exchange Commission..(Primoff, Richard) Modified on 9/2/2021 (vf). (Entered: 09/01/2021)

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  • 09/01/2021
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  • Docket(#4) NOTICE OF APPEARANCE by Richard G Primoff on behalf of Securities and Exchange Commission..(Primoff, Richard) (Entered: 09/01/2021)

    Read MoreRead Less
  • 09/01/2021
  • View Court Documents
  • Docket(#3) RELATED CASE AFFIRMATION of Richard R. Best re: that this action be filed as related to 21-4791. Document filed by Securities and Exchange Commission..(Best, Richard) (Entered: 09/01/2021)

    Read MoreRead Less
  • 09/01/2021
  • View Court Documents
  • Docket(#2) CIVIL COVER SHEET filed..(Best, Richard) (Entered: 09/01/2021)

    Read MoreRead Less
  • 09/01/2021
  • View Court Documents
  • Docket(#1) COMPLAINT against Glenn Arcaro, BitConnect, Future Money Ltd., Satish Kumbhani. Document filed by Securities and Exchange Commission..(Best, Richard) (Entered: 09/01/2021)

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