On August 13, 2021, the United States District Court for the Southern District of New York entered a judgment against Michael Noble (a.k.a. Michael Crypto) and a final judgment against Joshua Jeppesen for their involvement with BitConnect and the promotion of its "lending program." The court also entered a final judgment against Laura Mascola as a relief defendant. Pursuant to the judgments, the defendants and relief defendant have been ordered to collectively pay more than $3.5 million and 190 Bitcoin in disgorgement and prejudgment interest.

According to the SEC's complaint, filed on May 28, 2021, from approximately June 2017 to January 2018, Noble promoted BitConnect and marketed and sold securities in its "lending program."  The SEC's complaint alleges that Noble offered and sold the securities without registering the securities offering with the Commission, and without being registered as a broker-dealer with the Commission, as required by the federal securities laws.  The complaint further alleges that Jeppesen served as a liaison between BitConnect and promoters and represented BitConnect at conferences and promotional events, and that Mascola received certain proceeds from Jeppesen's BitConnect activities.

The SEC's complaint charges Noble with violating the registration provisions of the federal securities laws, and Jeppesen with aiding and abetting BitConnect's unregistered offer and sale of securities. The SEC's complaint further charges Mascola with unjust enrichment. Without admitting or denying the SEC's allegations, Noble consented to the entry of a judgment and Jeppesen consented to the entry of a final judgment pursuant to which Noble and Jeppesen each are permanently enjoined from violating the charged provisions and from offering, operating, or participating in certain marketing or sales programs and from participating directly or indirectly in a digital asset securities offering. The final judgment against Jeppesen orders him to pay $3,039,485 in disgorgement and prejudgment interest, 190 Bitcoin in disgorgement, and a $150,000 penalty, and to turn over information and access to a Bitcoin wallet to satisfy his obligation to pay the 190 Bitcoin in disgorgement. The judgment against Noble orders him to pay disgorgement, prejudgment interest and a civil penalty in an amount to be determined by the court at a later date upon the Commission's motion. The final judgment against Mascola orders her to pay $576,358 in disgorgement and prejudgment interest.

The SEC's ongoing investigation is being conducted by Gwen Licardo of the SEC's Retail Strategy Task Force, Michael Baker and Pamela Sawhney of the SEC's Cyber Unit, and Jordan Baker and Jorge Tenreiro of the SEC's New York Regional Office. The case is being supervised by John O. Enright, Lara Mehraban and Kristina Littman.  The litigation is being conducted by Mark Sylvester, Richard Primoff, Ms. Licardo, Mr. Baker, and Ms. Sawhney.

For more information, please see Press Release 2021-90.