USI-Tech, a bitcoin mining company based out of the United Arab Emirates, has vowed to reopen its doors to North American users, according to an announcement sent out to participants via its website:
The company’s lawyers acknowledge having regulatory issues in Texas, Washington, Minnesota and Hawaii due to the compensation structure and marketing tactics of the organization. As a result, USI opted to stop allowing users in North America to recruit new members, earn commissions or withdraw bitcoin until further notice.
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It now appears company president Horst Jicha is keeping the promise he made in an interview six days ago.
To continue working with USI’s legal team and allow North Americans the opportunity to withdraw funds or continue earning daily 1% returns on investment.
Not The SEC’s First Rodeo
The Securities Exchange Commission went after lending scheme BitConnect early in 2018 alleging the company was really a pyramid that had illegitimately raised the value of the company’s BCC token to over $4.1 billion USD.
Soon after the company received the cease and desist order, BitConnect announced it was shutting its doors, causing the value of the BCC token to plummet from over $435 to under $6 in less than one month.
Crystal Clear Indications
SteemIt user @thegrinder offers many reasons companies like BitConnect and USI appear ripe to eventually walk away with the hard-earned currency of users. Here are just a few:
- Websites littered with basic spelling and grammar errors due to the fact these companies are understaffed.
- Guaranteed high-yield returns on investment.
- Perpetual commission for referring new users to the platform.
- Asking users for cryptocurrency in exchange for cash, which can only be acquired via the company’s tokens. This inflates the value of the new token, which eventually crashes when authorities come into the picture.
Those doing business with USI are earning a 1% return paid in bitcoin rather than cash. While this does make USI slightly more sound economically, The company still promises incredibly high returns and makes users lock in funds for 140 business days prior to withdrawing.
Forced re-purchase is another hallmark of pyramid schemes.
So What’s Next?
It appears USI is committed to learning from BitConnect’s mistakes and that they actually intend to give North American users another shot at promoting the business, earning commissions and ultimately realizing their gains by withdrawing bitcoin into private wallets.
While those intentions are good, the company has yet to explain how they will comply with SEC rules as affiliates continue to promote USI while being ill-informed about said rules.
Only time will tell what happens next. For now, it’s safe to say the best thing any investor can do is to only take risks with money they can afford to lose. Even if that money is represented by a token.
Featured image from Shutterstock.