The Superior court has basically managed to reverse the entire decision that was made by the lower court regarding the class action against the Bitconnect scam.
According to crypto trading news today, the decision that was made by the lower court regarding the class action has been properly reversed by the superior court and hence the class action that was made against the alleged promoters of one of the most infamous scams in the world of crypto known as the Bitconnect Ponzi Scan will be proceeded with.
The particular 11th Circuit Court for the Appeals has actually made a ruling that the victims that were a part of the important and very well-known Ponzi Scheme of Bitconnect shall be allowed to proceed with the proper class-action suit that is definitely a reverse of the earlier judgment that was passed by a lower court about prohibiting any such case to take place.
Bitconnect is basically the ICO that was endlessly memed from the year 2017 and it collapsed in the year 2018 and that too in the month of January.
The Appellate courts are actually the superior courts that are basically used for reviewing the cases that have been tried previously and the main goal of these courts is to reverse or confirm the ruling that has been made by other courts.
The alleged victims may now move forward with a class action case against BitConnect (BCC) and its promoters Glenn Arcaro, Ryan Maasen, Trevon James, Ryan HiIdreth, and Craig Grant. There is no word yet on whether the complainants will proceed with the case.
The original complainants filed suit in order to be compensated for damages from being defrauded by BitConnect and its promoters. The complaint says promoters “made a mockery of state and federal securities laws.”
Law360 wrote on the 22nd of February that the defendants claimed in the Southern District of Florida that since marketing for the project was done using online mass communications platforms, they could not be held liable for securities fraud.
The defendants successfully argued that there could “only be a liability when a seller directs solicitations to particular prospective buyers.” By using online social media platforms, the promoters argued that they had not directly solicited the cryptocurrency from buyers. Without that direct solicitation, they argued there was no securities fraud.
However, the Circuit Court decided to reverse the lower court’s decision to accept that argument since there is no precedent of the Securities Act of 1933 preventing online videos from being used in fraud charges.
Judge Britt C. Grant wrote for the court’s panel on the 18th of February: “Because the Securities Act provides no free pass for online solicitations, we reverse the district court’s dismissal of the section 12 claim.”
The Circuit Court’s panel called the lower court’s reading of the Securities Act “cramped” and said that it “makes little sense” as it would have held a person liable for soliciting security in a personal letter, but not an internet video.
David Silver, an attorney in the original case against BitConnect and its promoters tweeted on the 19th of February “This is an incredibly important decision that will reverberate for years to come.”
This new precedent adds greater legal risks and responsibilities for crypto promoters who use YouTube, Twitter, and other online communications platforms to shill crypto. Judge Grant wrote, “A new means of solicitation is not any less of a solicitation.”
In recent years, YouTube has removed videos and shut down channels related to cryptocurrency it deems “harmful and dangerous.”
The Securities and Exchange Commission (SEC) filed suit against the founders and promoters last May and received $12.6 million in cash and BTC through a settlement deal in August. Last November, the Department of Justice (DOJ) said it planned to sell crypto it had seized from BitConnect valued at $56 million as potential compensatory payment for victims in future cases.