One of the most notorious members of the bitcoin community — the company BitConnect, was suspended emergency order
Council securities of the state of Texas (TSSB) January 4, 2018. According to the regulator, the credit platform had previously been seen in the implementation of fraudulent transactions that led to the ban of its operation in the state.
Among the various investment channels, was proposed in the UK cryptocurrency company, has a loan program that promises 40% profits via your trading bot. Every person even slightly versed in the financial environment, it becomes immediately clear that such fabulous profits promised only within the framework of the financial pyramid.
The next worrying sign is the lack of actual addresses. BitConnect claims that is based in England, but cannot provide specific address of your location. Also in November, the company threatened the closure of the Registration chamber of great Britain – for the same reason.
In addition, the firm was unable to provide a logical financial strategy, risk analysis or any explanation of how, exactly, investors will receive 40% profit. 1 December 2017 Antonopoulos Andreas (Andreas Antonopoulos) expressed his opinion in regard to the work of the company:
«The company promises a steady income, which is much higher than the market average? It is a pyramid. The company focuses more on recruiting people than on the product? It’s a pyramid.»
Despite the apparently fraudulent activities of the company since inception of which was held for a year and a half, so far it has not been any legal prohibitions. BitConnect recently announced the sale of tokens BitConnectX, which was scheduled for January 10, 2018. However, she was not destined to be carried out in accordance with the order of the Board for securities of Texas, she was also prohibited.
The main problem described in the order, due to the fact that investment BitConnect are not registered as securities in accordance with the securities Act of Texas and Council Regulations concerning securities. The Council report States:
«Investing in a lending program BitConnect and program equity has not been registered and a permit for their sale in Texas was not issued».
The wide distribution of this program, the company is required its sales agents. These individuals «were sent to residents of Texas at the website BitConnect with the purpose of investing in a lending program BitConnect» and then asked «to publish information about their participation in the program in social networks, blog and website». Antonopoulos celebrated on 14 November 2017:
«Bitconnect gives advertising on my YouTube channel, and I can’t seem to stop them. According to rumors, it is – pyramid scheme. Be attentive and careful.»
Bitconnect strategy was successful. The company released 9.4 million tokens approximately 4.1 billion dollars. All in all, it was created a 28 million tokens.
BitConnect has the right «to demand hearings on the administrative case» in which they can appeal against this order. Thirty days trade BCC would be illegal in Texas, and affiliates, which will continue to advertise the cryptographic token will be sentenced to two years imprisonment or to a fine of $ 5,000.