BitConnect shuts down exchange, lending platform

The team behind cryptocurrency company BitConnect announced they have closed down the exchange and lending platform, in the wake of early action from regulators.

Following the issuance of two cease and desist letters to the controversial exchange, BitConnect representatives gave 5 days’ notice of a pending shutdown of their exchange service, while ceasing business through their lending arm immediately.

According to posts published on the company’s website early this week, BitConnect will still support user accounts as a wallet service, following the decision to close parts of its business.

“In short, we are closing lending service and exchange service while BitConnect.co website will operate for wallet service, news and educational purposes,” according to the company.

The cease and desist letters issued by regulators in North Carolina and Texas respectively warned BitConnect the company was operating in unregistered securities, which could have paved the way for further enforcement action.

The BitConnect statement also blamed the impact of ‘bad press’ on user confidence, as well as a series of DDoS attacks against its platform, as factors in the company’s decision to wrap up its operations.

The news will be welcomed by some in the cryptocurrency community, including Vitalik Buterin, founder of ethereum, who is amongst those to have labelled BitConnect a ‘Ponzi scheme’.

Despite the setback, BitConnect maintained that a planned ICO for the company will still go ahead, albeit on a more limited prospectus.

“This is not the end of this community, but we are closing some of the services on the website platform and we will continue offering other cryptocurrency services in the future,” accoridng to the BitConnect.

The news will come as a blow to customers who had engaged with the BitConnect platform, and to those invested in its offshoot BitConnect (BCC) cryptocurrency, which peaked at over $430 earlier this month. On today’s news, BCC stands at around $5.93, down over 96%.