It was only a matter of time before the unregulated cryptocurrency markets suffered their first casualty.
Amid the headline news that bitcoin has lost upwards of $30 billion in value over the last 48 hours, BitConnect, a crypto trading exchange, has stopped operations on its lending ad trading platforms, according to the companys website. The closure comes after the exchange operator admitted to receiving Cease and Desist Letters from Texas and North Carolina.
Bitcoin, the standard bearer for crypto trading, is trading around $10,000 – well off its highs of $19,000.
In a post, the Bitconnect made the following statement:
Changes coming for the Bitconnect system – Halt of lending and exchange platform
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 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. This rate has been calculated based on last 15 days averages of the closing price registered on coinmarketcap.com. You are free to withdraw your BitConnect coin currently in QT wallets that was used for staking as well. We are also closing BCC exchange platform in 5 days. In short, we are closing lending service and exchange service while BitConnect.co website will operate for wallet service, news and educational purposes.
The reason for halt of lending and exchange platform has many reasons as follow:
The continuous bad press has made community members uneasy and created a lack of confidence in the platform.
We have received two Cease and Desist letters, one from the Texas State Securities Board, and one from the North Carolina Secretary of State Securities Division. These actions have become a hindrance for the legal continuation of the platform.
Outside forces have performed DDos attacks on platform several times and have made it clear that these will continue. These interruptions in service have made the platform unstable and have created more panic inside the community.
Closing the lending and exchange platform doesnt mean that we will stop supporting BitConnect coin. Closing the lending platform will allow Bitconnect to be listed on outside exchanges giving more options for trading.
We will keep working to make BitConnect coin available to merchant websites providing them API access to accept BitConnect Coins on their platforms.
BitConnect X ICO is still functional and we are building an exchange platform on the BitConnect X website. With BitConnect X operating as an exchange platform, BitConnect Coin (BCC) will be listed there.
This closure comes after US regulators – the Commodities Futures Trading Commission and Securities and Exchange Commission – have both issued public statement about the danger I crypto trading and investing and are holding public hearing to discuss these matters. Also, there will be Congressional hearings on the crypto universe and its potential problems.
BitConnect remains undeterred, as it said todays suspension of activity is not the end of its community, but we are closing some of the services on the website platform and we will continue offering other cyptocurrency services in the future.
Relatedly, BitConnect Coin, also known as BCC and issued by BitConnect was recently quoted down 97% to $6.09, according to CoinMarketCap.com data. BCC had traded as high as $322 on Tuesday.
