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BitConnect Closes its Exchange Amid Warnings from Regulatory Agencies

BitConnect has decided to close its lending platform and will do the same with its cryptocurrency exchange. The decision has been announced on Tuesday after different warnings from several regulatory agencies in the United States. The company explains that there are several reasons behind this decision and not just one.

BitConnect Closes Exchange and Lending Platform

The company has announced in a post that they are closing the BitConnect lending and exchange platform. The users will be able to withdraw their BitConnect coins (BCC) into their QT wallets. Furthermore, the lending wallet balance will be transferred to the BitConnect wallet at $363.62 dollars. The rate has been calculated based on the last 15 days averages of the closing price registered on Coinmarketcap.

The statement published reads as follows:

“This is to inform all community members that we are closing the BitConnect lending and exchange platform. We are closing the lending operation immediately with the release of all outstanding loans. With the release of your entire active loan in the lending wallet we are transferring all your lending wallet balance to your BitConnect wallet balance at 363.62 USD.”

The cryptocurrency BitConnect (BCC) has lost more than 95% of its value in the last 24 hours. At the moment of writing this article, the currency is being traded around $16 dollars in most of the exchanges. Before the announcement, the cryptocurrency was traded near $400 dollars per coin.

BitConnect Price Chart
BitConnect Price Chart

The Reasons Behind the Closing

The company has explained that there have been several reasons that influenced the decision to close the exchange and lending platform. The first reason was the continuous bad press that created a lack of confidence in the platform.

The second reason is that the company has received two Cease and Desist letter from the Texas State Securities Board and from the North Carolina Secretary of State Securities Division. That situation has created a complicated legal situation for BitConnect.

The last reason is that the platform ahs suffered from DDos attacks several times, creating an unstable platform and panic inside the community.

But according to the statement released, the company will not stop supporting BitConnect coin. The cryptocurrency will be traded in different exchanges giving more options for trading to its owners and possible interested investors.

“BitConnect X ICO is still functional and we are building an exchange platform on the BitConnect X website,” the company informs. “With BitConnect X operating as an exchange platform, BitConnect Coin (BCC) will be listed there. 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,” wrote BitConnect’s team.

What is BitConnect?

According to its webpage, BitConnect Coin is an open source, peer-to-peer, community that allows people to store or invest their money. The company explains that some of the users can receive a return on investment of about 1 percent a day.

The company has been accused of being a Ponzi scheme and a scam. Vitalik Buterin, Ethereum’s founder, has called that BitConnect runs a Ponzi scheme. Besides that, the platform has its own cryptocurrency that was in the top 100 list of cryptocurrencies by market capitalization.

It has been accused as a pyramid scheme too because of the multi-level referral feature. Several users were trying to use their referral code in order to obtain greater benefits.

The future can only tell whether the cryptocurrency BitConnect will keep being traded or it will be worth less as time passes.