Bad news hit BitConnect like a pile of bricks, when Texas Securities Commissioner (TSC) signed an Emergency Cease and Desist Order last week. The order was passed to immediately halt the company’s operations.
Apparently the company was found to be fraudulently conducting its business.
This development does not come as a surprise, as news.bitcoin had profiled a growing concern regarding the company’s activities back in November.
According to the press release, BitConnect is soliciting investors for cryptocurrency-based programs that the company claims will deliver annualized returns of 100% or more.
It further reads, “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.”
Prominent ecosystem lights from Andreas Antonopoulos to Erik Voorhees have also made it clear to move away from the scheme. Mr. Antonopoulos was plagued with advertisements on his Youtube channel, and pleaded with followers to help him untangle. Mr. Voorhees didn’t mince words in his Tweet, flat out telling followers “Bitconnect is a scam. Stay safe out there.”
Jameson Lopp approached a slightly more diplomatic approach, tweeting, “I’ve been getting more questions about bitconnect – as far as I can tell, it’s a scam. If you don’t believe me, just compare their (now removed) 2017 roadmap with the (lack of) activity on their GitHub repository.”