BitConnect Closes Exchange as States Warn of Unregulated Sales
BitConnect said it’s closing the company’s cryptocurrency exchange and lending operation.
(Bloomberg) -- BitConnect said it’s closing the company’s cryptocurrency exchange and lending operation after receiving two cease-and-desist letters from state authorities for the unauthorized sale of securities and suffering from denial-of-service attacks.
The Texas State Securities Board and North Carolina Secretary of State Securities Division warned that the firm isn’t registered to sell securities in those states, the company said on its website Tuesday. BitConnect offered to let people receive interest on their digital coin balance by lending or investing their capital.
BitConnect’s token, BCC, was among the world’s top-20 most successful tokens until its price plunged 65 percent since Jan. 3, as the states announced the actions. Launched a year ago, the coin still has a market cap of almost $1 billion.
States are becoming more active, and joining federal authorities in going after businesses related to bitcoin and other digital currencies that they allege try to avoid proper registrations. The Securities and Exchange Commission recently halted an initial coin offering -- in which a startup issues shares to raise funds -- of Munchee Inc., after it was found to have offered unregistered securities.
BitConnect.com will continue to operate a wallet and a news site, it said.
To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net.
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Dave Liedtka, Eric J. Weiner
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