Texas Regulator Bars BitConnect From In-State Activities

FinTech, ICO News, Investing, News, Regulation | January 5, 2018 By:

The Texas Securities Commissioner has entered an Emergency Cease and Desist Order to halt trading through BitConnect, a UK crypto community platform that offers multiple investment options using its own coin, BCC.

The coins are unregistered securities, the Texas Securities Commissioner ruled. and offers users investments in “programs that the company claims will deliver annualized returns of 100% or more.”

 “The Securities Commissioner found that the BitConnect investments are securities, but were not registered as required by the Texas Securities Act and State Securities Board Rules and Regulations,” said the statement. “In addition, the company is not registered to sell securities in Texas.”

While BitConnect, as a UK company, is not affected directly, the Texas regulators can stop BitConnect from dealing with Texas residents. How they can do that is open to speculation, given its lack of records and the inaccessibility of BitConnect’s operations, which does not provide a physical address in England.

BitConnect operates websites and deploys online advertising to recruit “affiliates,” who in turn market the company to others and get a commission on any sales.

BitConnect recently announced that it will hold an initial coin offering (ICO) in the U.S. starting on Tuesday, Jan. 9.