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Look, when Gary Gensler took his seat at the head of the SEC earlier this year, we were promised something a little different. The guy taught courses at MIT call “blockchain technology” and “digital currencies” for crying out loud.

He, uh, had some stumbles out of the gate.

But now it looks like Gensler’s SEC is finally starting to deliver on the crypto protections it promised to keep retail investors from being talked into blowing grandma’s Social Security check on Garfield NFTs or whatever.

The Securities and Exchange Commission announced today that it has filed an action against BitConnect, an online crypto lending platform, its founder Satish Kumbhani, and its top U.S. promoter and his affiliated company, alleging that they defrauded retail investors out of $2 billion through a global fraudulent and unregistered offering of investments into a program involving digital assets.

Well, hey, the founder and a top promoter charged too instead of just underlings and entities. Maybe the Elizabeth Holmes effect is taking root even in her first week of trial. But it could just be that the allegations seem, let’s say, quite serious.

The SEC said investors in a BitConnect ‘lending program’ were told BitConnect would use a ‘volatility software trading bot’ that could generate returns of 40% per month, and were given fictitious returns showing gains of about 3,700% per year.

In reality, the SEC said BitConnect investors lost much of their money after the price of BitConnect Coin sank 92% on Jan. 16, 2018.

“Volatility trading bot” has got to be a new one. The SEC is not amused.

‘We allege that these defendants stole billions of dollars from retail investors around the world by exploiting their interest in digital assets,’ said Lara Shalov Mehraban, Associate Regional Director of SEC’s New York Regional Office. ‘We will aggressively pursue and hold accountable those who engage in misconduct in the digital asset space.’

Well, good luck to the defendants facing down…that. And kudos to the SEC for aggressively pursuing some executives this time.

SEC Charges Global Crypto Lending Platform and Top Executives in $2 Billion Fraud [U.S. Securities and Exchange Commission]

U.S. SEC sues BitConnect founder over alleged $2 billion cryptocurrency fraud [Reuters]

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