Bitconnect Price Dips by 90% Amid Announcement of Exchange Closure
But the company is adamant that it isn't the end
Ask anyone who has spent over a year in the crypto space and they will tell you that BitConnect is notorious for courting controversy. Although the cryptocurrency has been a promising entity for a while to some investors, its value has dropped by 90 percent amid announcements concerning the closure of its exchange and lending operations.
According to the announcement on its website, the Bitconnect operators explained that the move to close down the exchange and lending platform was as a result of looming legal problems with US regulators and “bad press”. According to CoinMarketCap, BitConnect’s market capitalization dropped to $175, 637, 617 from about a billion, just months ago. In fact, in the last 24 hours, a total of $17 million worth of BitConnect tokens were traded.
Emerging Regulatory Challenges and DDoS Attacks
In the company’s Tuesday announcement that revealed BitConnect’s five-day plan to shut down its lending platform and exchange operations, the operators added that the website would remain active for news, wallet services and educational programs.
However, apart from the company’s claim of harsh regulatory scrutiny as part of the reason for closure, the announcement also mentioned DDoS attacks and “bad press” as additional reasons for the closure of its services. The platform has become unstable in the past few days, with the site occasionally going down for maintenance. The company claims in the post that the DDoS attack caused anxiety and lack of confidence among its users.
Furthermore, BitConnect was also issued with a cease and desist order by a Texas securities regulator. The regulator claimed that the company was fraudulent for not being transparent with its source of funds. In addition, North Carolina also issued a cease and desist order that required BitConnect to stop soliciting security purchase offers in the USA.
More BitConnect Critics
Truth be told, the company has received a lot of criticism with most people calling it a scam and a ponzi scheme that is out to grab Bitcoins from innocent investors. The creator of Litecoin, Charlie Lee, stated in December 2017 that he passed on the chance to invest in the company, citing its ponzi scheme model. His statements came only a month after Vitalik Buterin (the creator and founder of Ethereum) warned investors to be wary of the high yield investment program (HYIP) based on its promise for huge returns.
‘This Is Not the End’
Although the company is planning the closure of its lending and exchange platform, the post further indicated that the BitConnect Community will further benefit from other crypto services in the future. According to the statement, the entity will continue to support the BitConnect token with plans for an exchange platform on its recently launched Bitconnect X ICO.
Do you think this is the end of BitConnect? Share your thoughts and opinions with us in the comments section.