BitConnect Shuts Cryptocurrency Exchange Citing Bad Press, DDoS Attacks, Regulator Scrutiny

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The operator of BitConnect, a cryptocurrency that has long courted controversy, has announced the closure of its cryptocurrency exchange and a separate lending platform.

In an announcement on its website on Tuesday, BitConnect confirmed the immediate closure of its lending operation whereas its exchange platform will effectively shutter in a further five days. The website, meanwhile, will remain open for “wallet service, news and educational services,” the notice from the investment platform added.

The operator pointed to three specific reasons behind the shuttering of its platforms. As reported previously, Texas’ securities regulator issued an emergency cease and desist to BitConnect earlier this month, accusing the operator of fraud for failing to clearly identify its ‘principals’ as well as the “source of funds that will be used to pay investors [an] interest of 120% per year.” The state of Carolina followed suit [PDF], ordering BitConnect to refrain from “offering for sale, soliciting offers to purchase or selling” any securities in the state.

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

The post also blamed ‘outside forces’ instigating DDoS attacks on the platform, making it ‘unstable’ and creating ‘panic inside the community.’

Further, “the continuous bad press has made community members uneasy and created a lack of confidence in the platform,” the post added. Among the critics are prominent figures in the cryptocurrency community including the likes of Litecoin creator Charlie Lee and Ethereum founder Vitalik Buterin. Lee publicly stated he refused to invest in BitConnect, a coin and platform that “seems like a classic ponzi scheme,” in December 2017. A month prior, Buterin also suggested that the heightened returns promised to investors makes BitConnect “a ponzi.”

Meanwhile, BitConnect insists that it will continue supporting its digital token despite closing its own exchange and lending platform. The ‘BitConnect X ICO’ remains functional, the operator added, pointing to an upcoming exchange platform on its ‘BitConnect X’ website that will list its token cryptocurrency BitConnect Coin (BCC).

“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 cryptocurrency services in the future,” the notice added defiantly.

Featured image from Shutterstock.

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Samburaj is the Editor for CCN, among the earliest and foremost publications covering blockchain, cryptocurrency and financial technology news. He has authored over 1,500 articles for CCN and is invested in Bitcoin. Email: [email protected]