BitConnect, an investment lending platform for Bitcoin, has suddenly announced that it is shuttering its lending and exchange operation immediately. The company said that its exchange platform would shut down in five days. In a post on its site, BitConnect said that moving forward, it would operate for “wallet service, news and educational purposes.”
The announcement caused the price of BitConnect Coins (BCC), which is its Bitcoin currency, to plunge by over 90%–from over $400/coin to about $17.25/coin. Now, its investors are left wondering what to do with their coins.
Some site users are claiming that even though the exchange for the BCCs was supposed to stay open throughout the week, they have been unable to process trades because they cannot access the exchange. CoinDesk reports that one investor sent an email, claiming over $400K in losses because of this.
BitConnect had solicited investors in Texas and other US states. Recently, both the Texas State Securities Board, which called the company’s tokens unregistered securities, and the North Carolina Securities Division, which contended that an upcoming BitConnect initial coin offering involved the selling of unregistered securities, issued temporary cease-and-desist orders. The regulators alleged fraud, with the North Carolina regulator accusing BitConnect promoters of also engaging in illegal activity. The Texas regulator ordered the company to stop several of its investment programs.
The company has worked with multi-level affiliate marketers to pursue new investors, who also supposedly would be allowed to bring in investors. Some of these affiliates would go online, touting their investment “profits” even though they had made the money from commissions, not investments.
BitConnect had offered its tokens with the promise of 100% yearly returns, including up to 40% monthly returns and a 1% return of investment daily. The more cash that someone invested, supposedly, the larger and more immediate the possibility of profits.
Texas Securities Fraud
Our Houston securities fraud law firm are here to help investors that have lost money because of fraud to recoup their losses. Please contact Shepherd Smith Edwards and Kantas LTD LLP today and ask for your free consultation with one of our experienced Texas securities attorneys.
How BitConnect pulled the biggest exit scheme in cryptocurrency, MSN, January 17, 2018
BitConnect Investors Left in the Lurch as Token’s Price Drops 90%, CoinDesk, January 17, 2018
More Blog Posts:
Texas Securities Regulator Orders BitConnect To Stop Allegedly Fraudulent Sales of Unregistered Bitcoin Investments, Stockbroker Fraud Blog, January 4, 2018
FINRA Warns About Cryptocurrency Related-Fraud, Stockbroker Fraud Blog, December 22, 2017
Royal Bank of Scotland Settles Mortgage-Backed Securities Fraud Case Brought by Pension Funds for $125M, Institutional Investor Securities Blog, December 29, 2017
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