The cryptocurrency BitConnect has become one of the most controversial digital currencies on the market. Since its launch, many observers have accused BitConnect of operating as a Ponzi scheme. Now the company behind BitConnect has announced it will immediately shut down its lending platform and close its exchange platform within the next four days. As a result, BCC’s price plunged roughly 90 percent within 24 hours.
Yesterday, on January 16, 2018 at 10:00, a BitConnect token was trading for more than €250. As the chart shows, the price collapsed as soon as the announcement was released and has moved in only one direction since — downwards.
According to a statement on BitConnect’s website, the lending platform will be closed immediately and the exchange platform will be shut down within four days. The exchange service has reportedly been offline since yesterday because of a distributed denial-of-service (DDoS) attack, according to a Twitter post.
The BitConnect.co website will remain available for wallet access and news updates, the company said.
The company cites pressure from U.S. authorities and sustained negative media coverage as primary reasons for the shutdown. BitConnect LTD has long faced allegations that it operates a Ponzi-style scheme.
In recent weeks and months BitConnect attracted scrutiny from national regulators. In November 2017 the U.K. Registrar of Companies published a notice threatening BitConnect LTD with closure unless the company provided counter-evidence within a two-month window.
About two weeks ago the Texas State Securities Board (TSSB) barred BitConnect from carrying out an initial coin offering (ICO) planned for January 10, 2018. The TSSB said the proposed BitConnect X offering amounted to an unregistered sale of securities.
According to BitConnect’s statement, the TSSB action became a decisive obstacle to legally continuing the BitConnect platform. The company also blamed a series of DDoS attacks for contributing to the decision to shut down services.
BitConnect announced on Twitter that it is pursuing legal action to seek approval from U.S. authorities to proceed with the BitConnect X ICO, and that the team plans to build an alternative exchange platform.
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