Bitconnect announced that the company will be closing its exchange and lending services after receiving two cease and desist letters from state authorities for selling securities unauthorized and experiencing denial-of-service attacks.
The Texas State Securities Board and North Carolina Secretary of State Securities Division has notified that the company is not registered to sell securities in those states, said the firm on its website on Tuesday. Bitconnect let their customers receive their interest on their cryptocurrency balance by lending or investing their funds.
BCC, Bitconnect’s token, was in the top 20 most successful tokens till it saw a massive plunge in price of 65% that began in January 3rd when the states issued their warning letters.
States are becoming more involved in going after businesses that deal with bitcoin and cryptocurrencies, as federal authorities penalize those that try to avoid proper registration.
Just recently, the Securities and Exchange Commission stopped an initial coin offering (a way through which funds are raised for a startup) of Munchee Inc. after it was discovered that they offered unregistered securities.
Bitconnect.com will continue to offer its services as a wallet and will also post news on its site.