Investors filed a lawsuit against platform BitConnect

Just a week after the sudden closure
cryptocurrency pyramid BitConnect its investors filed a lawsuit demanding the refund.

In a class action filed in the southern district court of Florida on January 24, alleges that BitConnect has released a cryptocurrency tokens that were in fact unregistered securities and had also collected additional money through a «fraudulent pyramid scheme». The lawsuit was filed by David silver (David Silver) from Silver Miller, which acts on behalf of the buyers of tokens BitConnect.

The document States that BitConnect he was responsible for several projects, for example, lending programs, under which investors were supposed to send cryptocurrency to buy coins BitConnect, the token created by the platform company. BitConnect promised investors that its own trading platform will use the funds to generate a monthly income in the amount of 40% or a daily cumulative rate of 1%, which can be 3,000% annual return.

The plaintiffs argue that the company BitConnect has violated the securities Act by issuing unregistered shares. The paper also cited a statement from the website BitConnect:

«This potential investment includes the profit from trading bot BitConnect. You will receive a daily profit based on your investment opportunities. At the end of the investment period you get your capital back and can withdraw it from the platform lending BitConnect or perhaps re-invest it in her to continue to receive daily profit».

The plaintiffs also allege that instead of using funds to trade cryptocurrencies BitConnect worked as a pyramid scheme and collecting money from new investors for payments to early depositors. According to the document, six individuals filed suit on behalf of all the investors and account holders that have transferred funds (both cryptocurrency and Fiat currency) to BitConnect for investment. Six plaintiffs said their losses totaled 771 000 dollars.

BitConnect closure occurred after the state of Texas
and North Carolina has banned the work of the platform and the number of new investors have nadalo to plummet. This subsequently led to a 90% reduction in the cost of the coin BitConnect, which is still trading on several cryptocurrency exchanges

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