Market correction leaves faithful shaken but undeterred
Amid a cryptocurrency price correction that has seen the price of Bitcoin drop by half from its mid-December peak, UK-based cyber-cash lending and exchange biz BitConnect said it is shutting down.
The firm, dogged by accusations that it is a Ponzi scheme, cited bad press, regulatory orders, and cyber attacks for its market exit this week.
BitConnect said it has received two cease-and-desist letters from US financial watchdogs: one from the Texas State Securities Board, and one from the Securities Division of North Carolina's Secretary of State.
The letter from Texas authorities, an emergency cease-and-desist order sent January 3, 2018, charges the company with fraud and misleading investors.
Noting that such rates "are extremely unusual in financial markets," the North Carolina letter stated: "Guaranteed annual compounded investment returns of over 3,000 per cent are a known 'red-flag' for fraud, specifically for the risk that the investment may be a 'Ponzi scheme.'"