BitConnect Closes Its Lending And Exchange Platformbr>
Crypto investment platform BitConnect will be closing its lending and exchange platform. The company’s lending operation will be shut down, effectively immediately, while its BCC exchange platform will close in five days.
Registered in Great Britain, BitConnect claims to be an open source, all-in-one crypto community platform designed to provide multiple investment opportunities. It was promising one percent daily returns and touting this as the primary benefit of the project. But many observers questioned these claims, including regulators.
Some called it a Ponzi scheme, whereby earlier investors were paid by new investment money. Crypto pioneers, including ethereum founder Vitalik Buterin and Litecoin founder Charlie Lee, have levied criticisms against the investment platform in recent months. BitConnect said these criticisms made community members uneasy and created a lack of confidence in the platform.
The company’s BCC token was among the world’s top-20 most successful tokens until its price plunged 90 percent since January 3. The token plummeted from $290 to under $10 before recovering slightly.
BitConnect was notorious for its army of recruiters touting the service online and in forums. Yesterday, supporters were few, as the inevitable end arrived.
“We are closing the lending operation immediately with the release of all outstanding loans,” the company said. “With release of your entire active loan in the lending wallet, we are transferring all your lending wallet balance to your BitConnect wallet balance at 363.62 USD. This rate has been calculated based on last 15 days averages of the closing price registered on coinmarketcap.com.”
The move came after BitConnect received two cease-and-desist orders from state authorities for the unauthorized sale of securities tied to a token sale. Earlier this month, the Texas State Securities Board and North Carolina Secretary of State Securities Division warned that the company isn’t registered to sell securities in those states.
The company said these actions have become a hindrance for the legal continuation of the platform. It also said that DDos attacks made the platform unstable and have created more panic inside the community.
The company said that they will continue to support the BCC token. The shut down of the platform will allow BCC to be listed on outside exchanges.
“We will keep working to make BitConnect coin available to merchant websites providing them API access to accept BitConnect Coins on their platforms,” the company said.
Despite receiving cease-and-desist orders, the company said that its BitConnect X initial coin offering (ICO) will continue and that they are building an exchange platform for the token.