The widest reaching lawsuit against BitConnect thus far is the first Florida class-action.
Filed on January 24th, the initial class-action complaint sought to hold BitConnect, Glenn Arcaro, Nicholas “CryptoNick” Trovato, Ryan Hildreth, Trevon James and Craig Grant liable for $771,000 in BitConnect investor losses.
On January 30th an amended complaint was filed, adding Ryan Maasen and Joshua Jeppesen as defendants.
Maasen is another YouTube promoter. Joshua Jeppesen is credited as BitConnect’s Development Director.
Joshua Jeppesen played an integral role in developing and promoting the BitConnect websites.
Without his vital contributions, the BitConnect websites would not have functioned as well as they did and would not have ensnared as many victims who fell prey to Defendants’ promotion of the BitConnect Investments.
Following a similar filing in the Kentucky class-action, on February 5th a TRO was sought against each of the named defendants above.
The Florida TRO alleges Arcaro, James, Hildreth, Grant, Trovato (CryptoNick) and Maasen “were paid sizeable commissions” for ” funneling
additional investors” into BitConnect.
It goes on to single out the defendant promoters as ‘among the most influential, and most successful, of’ BitConnect’s affiliates‘.
Defendants GLENN ARCARO, TREVON JAMES, RYAN HILDRETH, CRAIG GRANT, CRYPTONICK, and RYAN MAASEN encouraged their YouTube viewers and social media followers — including Plaintiffs and the Class — not to keep their investment returns; but instead to re-invest the daily interest earnings back into BITCONNECT.
As a result, the typical user never actually made money; while the money generated by the “program” kept getting re-circulated into BITCONNECT.
The TRO alleges that while the majority of BitConnect investors have lost 95% of their investments, the company and top affiliates ‘reap the benefits of their fraud and theft‘.
In the wake of BITCONNECT’s abrupt closure of its lending and exchange operations, many of BITCONNECT’s promoters — including Defendants GLENN ARCARO, TREVON JAMES, RYAN HILDRETH, CRAIG GRANT, CRYPTONICK, and RYAN MAASEN — furiously deleted their promotional videos and materials from the internet.
BitConnect and Ryan Maasen are already subject to the Kentucky TRO. If granted, the Florida TRO will effectively freeze cryptocurrency assets held by Glenn Arcaro, Nicholas Trovato (CryptoNick), Ryan Hildreth, Trevon James, Joshua Jeppesen and Craig Grant.
This includes prohibiting the defendants from transferring or dissipating funds attached to or derived from BitConnect.
They would also be required to provide the court with ‘an accounting of the remaining funds and assets’ in their possession that are connected to BitConnect.
There is a significant risk that BITCONNECT and its promoters, including Defendants GLENN ARCARO, TREVON JAMES, RYAN HILDRETH, CRAIG GRANT, CRYPTONICK, and RYAN MASSEN, may dissipate money generated from Plaintiffs and the Class or simply transfer those funds into another financial scam.
Videos from the named defendants promoting the BitConnect Ponzi clone DavorCoin are referenced as evidence of this risk in action.
The granted Kentucky TRO is cited as evidence the requirements for a TRO in the Florida class-action have been met.
Federal and Florida securities law do not materially differ from the regulation of securities in Texas and North Carolina; and therefore, it is very likely that Plaintiffs and the Class’ claims arising from violations of federal and Florida securities laws have a very high likelihood of success.
That said, the logistics of effectively enforcing a TRO against BitConnect and the defendants cannot be ignored.
BITCONNECT’s officers and Directors — with the exception of
Defendants JEPESSEN and ARCARO — are believed to all be foreign nationals; and therefore it is difficult to inform the appropriate individuals of the relief sought.
6 Upon information and belief, both Defendant JEPPESEN and Defendant ARCARO are travelling indefinitely through Europe and Asia.
Any responses by the defendants to the TRO motion are to be filed by February 20th.