BitConnect Faces Another Lawsuit Over Ponzi Allegationsbr>
Crypto investment platform BitConnect has been hit with another class action lawsuit.
The lawsuit, filed by investor Brian Paige in Kentucky federal court, names BitConnect International, BitConnect LTD, Bitcoinnect Trading LTD, and Ryan Maasen as defendants. The plaintiff alleges that BitConnect’s investment platform is actually a Ponzi scheme, as it claims to provide a monthly return of 40 percent. Paige is seeking an undisclosed amount in damages.
The lawsuit also claims that Oklahoma resident Ryan Maasen acted as an unregistered agent for BitConnect, and had profited from misleading investors about the potential returns they would see.
Paige claimed that he contacted Maasen to ask if the return was real. “Maasen responded by citing the meteoric rise of bitcoin: “Just look at how much bitcoin has grown since it started. Fractions of a penny to now over $7K…crypto is incredible!,” Maasen wrote, according to the complaint.
Paige claimed he invested $100 initially in November and another $5,010 in late December before BitConnect shut down its platform.
“With this transaction, BitConnect promised to plaintiff and the class fixed returns, as well as a guarantee that the principal investment/loan amount would be paid in full on date certain,” the filing states. “Instead, BitConnect shut down its platform, took all of plaintiff and the class’s money, and left them with BCC, which is either entirely worthless or has significantly less value than BitConnect promised.”
At the beginning of 2018, BitConnect’s BCC coin had been trading at higher than $400, but after it was served with cease and desist orders in both Texas and North Carolina, it has fallen dramatically and was trading at approximately $6.08 as of January 30.
This is the second such complaint this week. The previous legal filing, submitted in Florida by the law firm Silver Miller on behalf of six investors, seeks legal action to claim back their funds. The plaintiffs are seeking over $770,000 from BitConnect and the YouTube representatives who helped promote it.