Skip to content

Texas Officials Strike BitConnect With Order to Stop and Abstain

Get trading recommendations and read reviews on for only $ 39 a month

The Texas Securities Commissioner has filed a cease-and-desist order Emergency for BitConnect late Thursday night. In the official report the board of directors of Texas State Securities accuses the London-based investment platform of fraud and sale of unauthorized securities.

BitConnect in the hot water

Throughout the article, the State of Texas lists a number of details surrounding the BitConnect investment model, including its rate of return, its loan program and its staking program.

These findings, according to the Commissioner, meet all the criteria of a traditional guarantee and, as such, BitConnect is currently selling illegally its assets:

"The respondent BitConnect violates section 7 of the Texas Securities Act by offering securities for sale in Texas at a time when securities are not registered with the Securities Commissioner . "

The report also found that BitConnect is committing fraud for failing to disclose "the identity of its principals" and "the source of the funds that will be used to pay the investors' interest at a rate of 120% per year, "Among other obscurities. In addition, the order condemns BitConnect for its "misleading and deceptively material statements" that market it as a safe and risk free option for high yield investments.

In response to these findings, the Commissioner concludes the report by ordering BitConnect to suspend its operations in the state:

"IT IS THEREFORE ORDERED that the Respondent BitConnect immediately CEASE and DESIST offer to sell any security in Texas until the security is registered with the Securities Commissioner. or offered for sale under an exemption from registration Texas Securities Act. "

Orders continue to require BitConnect to stop committing fraud or publishing misleading statements about its securities.

See also  Higher Ground Labs supports 13 startups to help Democrats win in 2018 and beyond

The regulators corroborate the suspicions of the community

Some members of the crypto community have long been suspicious of BitConnect and its high-yield, low-risk promise. Seen from the outside, it seems downright suspicious, and many have called it outright scam.

These opponents include prominent figures such as Vitalik Buterin, founder of Ethereum, and Charlie Lee, founder of Litecoin. In November, the two community spokespersons voted against the platform, reaching a consensus that it functions as a ponzi textbook system.

The order to cease and abstain from Texas certainly lends credibility to these claims because an official charge of fraud from a government authority will be hard to shake for BitConnect . Still, the report did not provide details on how Texas officials plan to execute orders, and it remains to be seen whether or not they will be able to effectively regulate the purchase. and the sale of BitConnect within the state. ]

Image of Shutterstock at one time

Follow us on Telegram.