US Regulator Ordered Bitcoin Lending Platform Bitconnect to Stop Operations
Without a doubt, Bitconnect is dealing with some serious issues. The Texas Securities Commissioner (TSC) has ordered the platform to stop from operating. The authorities sent a cease and desist order to Bitconnect's office, signed by the TSC.
Bitconnect has become a popular bitcoin lending platform, but for quite some time it has been linked to allegations of being a scam. A press release from the TSC indicated that the aim of the cease and desist order actually was to end these concerns. The press release indicated:
“The Texas Securities Commissioner has entered an Emergency Cease and Desist Order to halt the multiple investment programs operated by Bitconnect, an overseas company that claims a market share of $4.1 billion for its cryptocurrency coins.”
Bitconnect concerns first emerged in November, 2017
First concerns on the potential scam link of Bitconnect were made public in November, 2017. Some specialized media outlets claimed that the promises made by the company looked like a scam. According to the TSC, the company asked users to invest in a program that allegedly delivered annual returns of 100% or more. The TSC said:
“The company requires individuals to use Bitcoin, a more established cryptocurrency, to invest in various Bitconnect programs. In one investment called the Bitconnect Lending Program, investors purchase Bitconnect Coins, which are provided to a ‘Bitconnect Trading Bot’ to generate ‘returns as high as 40% a month.”
Several people have seen the scam potential of Bitconnect and have previously asked investors to stay away from this platform. TSC however claimed that several residents in Texas were targeted by sales agents for Bitconnect. The TSC said that these sales agents were actually not officially registered as Bitconnect's agents and were not able to legally sell securities in the US state.
