The controversial cryptocurrency BitConnect has been generating a stir recently amid claims of ponzi schemes and unregulated issuance of securities. The company has now announced that it will close down its lending and exchange platform.
BitConnect’s investing service has long been labelled a scam and a ponzi scheme, accused of offering unrealistic returns and requiring users to invest bitcoin, not their native ‘BitConnect’ (BCC) currency. This has raised eyebrows among the crypto community and sparked fears of uneducated investors losing money.
BitConnect’s lending service is to be be closed effectively immediately, while its exchange platform will close in 5 days, according to this recent post on its website.
“We have received two Cease and Desist letters, one from the Texas State Securities Board, and one from the North Carolina Secretary of State Securities Division,”
“These actions have become a hindrance for the legal continuation of the platform.”
The company also site ‘bad press’ and ‘DDOS attacks’ as contributing factors to their decision.
Investors were paid out in BCC, sparking a mass dumping which saw the coin’s value drop a whopping 80%.