Controversial BitConnect service closes its doors

BitConnect, a service that promised to pay out profits in exchange for investing in a cryptocurrency, has announced that it will stop operating as an exchange and credit platform. The service was called Ponzi fraud by several people.

In a statement BitConnect writes that it is closing its credit platform, where people could invest, with immediate effect. It wants to repay all credits provided by users, taking into account a rate of $363.62 per unit of its cryptocurrency BCC. That amount would come from an average of the past fifteen days. Meanwhile, the value of BCC has plummeted, to below $ 20, Coinmarketcap learns. BitConnect also announces that it will stop its exchange within five days. The organization wants to continue to offer other services.

The service cites a number of reasons for its decision to stop, including bad publicity and DDoS attacks. It also refers to cease and desist orders from regulators from the US states of Texas and North Carolina. For example, the Texas regulator wrote, “BitConnect is looking for investors for cryptocurrency-based programs, which the company estimates yield 100 percent or more returns.”

Further on, the statement states that UK-based BitConnect is issuing its own cryptocurrency under the name BitConnect Coins. The regulator reported: “The company requires individuals to use bitcoin to invest in various BitConnect programs. One of these is called the BitConnect Lending Program, where investors buy BCC which is then made available to a BitConnect Trading Bot to earn maximum returns of forty euros. percent to generate.” The watchdog goes on to say that the company has not disclosed any information about itself, including how it promises to generate profits.

The service also offered a referral program, which allowed users to earn bitcoins by bringing in new members who then also invested. Several members of the cryptocurrency community, including Ethereum founder Vitalik Buterin, have described BitConnect as a ponzi scam, according to The Next Web. The profit distribution of existing investors is financed with the investment of new investors. BCC was worth about $430 at its peak.