BitConnect tokens banned in Texas

Emergency Cease and Desist Order released by The Texas Securities Commissioner against Bitconnect for the selling of unlicensed securities
05 January 2018   383

The Texas Securities Commissioner issued an Emergency Cease and Desist Order on Jan. 4 against Bitconnect for the selling of unlicensed securities. This is reported by Cointelegraph.

The Securities Commissioner found that the BitConnect investments are securities, but were not registered as required by the Texas Securities Act and State Securities Board Rules and Regulations. In addition, the company is not registered to sell securities in Texas.
 

Texas State Securities Board

According to the project description, BitConnect promises investors an income of 100% per annum or more.

BitConnect has disclosed virtually nothing about its principals, financial condition, or strategies for earning profits for investors. It has not provided a physical address in England.
Despite providing no information on how it will make money for investors – including the algorithms behind the Trading Bot – BitConnect is touting its investments as a “safe way to earn a high rate of return.
Investing in cryptocurrencies, however, carries significant risk because of regulatory and legal actions, competition from other cryptocurrencies, and the extreme volatility in the price of many cryptocurrencies.
 

Texas State Securities Board

Previously, many bitcoins-enthusiasts accused BitConnect of being a financial pyramid, including co-founder Ethereum Vitalik Buterin wrote on Twitter that the promise of a certain income indicates that this project is a scheme of Ponzi.

FBI to Investigate Bitconnect Activity

This is told by former investor and promoter of the project
07 March 2018   243

Trevon James, a former investor and promoter of the BitConnect crypto currency project, said that the agents of the US Federal Bureau of Investigation interrogated him about his involvement in the company's activities. This is reported by CoinDesk.

James said that in 10 days he should "testify and tell about his role in BitConnect", but did not specify in which format the hearings will be held. He also added that he never had information about the company's plans and the road map.

According to the ex-promoter, he expects that the testimony will be in the same format as his one and a half hour "conversation" with FBI agents, during which he told about his experience with BitConnect as a user.

It's really about the SEC. Testimony is really important you know, for the entire crypto space because ... it's about securities. Is Bitconnect a security, are cryptocurrencies, can they be considered securities? That's what it's about, it's not about whether I scammed people.
 

Trevon James 

Former investor and promoter, BitConnect

It should be noted that in the middle of January the crypto exchange project BitConnect announced the closure of the program of lending and exchange. The reason for this step was the two official resolutions on the termination of activity from the regulators of the states of Texas and North Carolina. Subsequently, two lawsuits were also filed against BitConnect.