BitConnect Shutters Crypto Exchange Site After Regulator Warnings

The company behind the controversial cryptocurrency BitConnect has announced that it will close down its lending and exchange platform.

AccessTimeIconJan 17, 2018 at 12:22 a.m. UTC
Updated Sep 13, 2021 at 7:23 a.m. UTC
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The company behind the controversial cryptocurrency BitConnect has announced that it will close down its lending and exchange platform.

BitConnect’s lending service will be shuttered, effectively immediately, while its exchange platform will close in 5 days, according to a post on its website published Tuesday.

“In short, we are closing lending service and exchange service while BitConnect.co website will operate for wallet service, news and educational purposes,” the post explained.

The announcement blames a myriad of factors, perhaps most notably the cease-and-desist letters issued in recent days from regulators in Texas and North Carolina.

Both letters stated that BitConnect was engaging in the sale of unregistered securities tied to a token sale.

“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,” the BitConnect team wrote. “These actions have become a hindrance for the legal continuation of the platform.”

The post also blamed “bad press” that has “made community members uneasy and created a lack of confidence in the platform.”

BitConnect has been accused of constituting a Ponzi scheme, and several figures in the space, including the founder of ethereum, Vitalik Buterin, have levied criticisms against it in recent months.

The BitConnect team also blamed a string of dedicated denial-of-service attacks (DDoS).

Since as early as Jan. 13, BitConnect’s Twitter account has blamed DDoS attacks for problems with its website.

Yet despite the cease-and-desist letters, BitConnect said that its in-progress initial coin offering (ICO) will continue, and that it is building an alternative exchange for the BitConnect token.

“This is not the end of this community, but we are closing some of the services on the website platform and we will continue offering other cyptocurrency [sic] services in the future,” the team wrote.

Image via BitConnect.

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