BitConnect's shutdown seems to have taken a lot of people by surprise, but the truth is that even more have been expecting it for quite some time now. This is due to the fact that the investment platform has been the subject of criticism from a number of well-respected cryptocurrency and blockchain experts in the past, most notably when Ethereum founder Vitalik Buterin and Litecoin founder Charlie Lee both spoke against it and called it a mere Ponzi scheme. Not to mention all of the countless individuals who have spoken out against it, saying that it "really seems like a scam."
It would appear that BitConnect managed to survive and even thrive despite all of the criticism it received. But now its time has come to an end. In its official shutdown announcement, BitConnect identifies three distinct reasons for its demise.
First, it blames all of the "bad press" it has received, saying that it has "made the community members uneasy" and caused them to lose confidence in the platform. Second, it mentions that it received two Cease and Desist letters – one from the Texas State Securities Board and another from the North Carolina Secretary of State Securities Division – which have now "become a hindrance for the legal continuation of the platform." Finally, it refers to certain "outside forces" that have performed Distributed Denial of Service (DDoS) attacks on their platform in the past and apparently "have made it clear that these will continue." Rather than continuing to push through all of the interruptions that occur, it has evidently just decided to give up and cease operations.
Since BitConnect will no longer operate as a Bitcoin investment platform, it has started releasing all outstanding active loans to its users. Its official statement says, "With release of your entire active loan in the lending wallet we are transferring all your lending wallet balance to your BitConnect wallet balance at 363.62 USD." It is said that this rate was calculated based on the last 15 days averages of the closing price on CoinMarketCap.com. For now, the BitConnect.co website will remain operational, but only as a wallet service and for news and educational services.
As of this time's writing, BitConnect's once valuable token, BCC, has taken a huge dip in price. Indeed, it's now going down at a slow and steady pace. Still, even in announcing the end of its operations, BitConnect tried to sound optimistic by saying that it isn't the end of their community. Although they are closing some of the services on the BitConnect website platform, they will "continue offering other cryptocurrency services in the future."
Of course, that's not really up for them to decide. After all, the industry was quick to catch on the first time they tried to do shady business. So there's a fair chance that critics as well as the authorities will have them on radar to watch their every move. Now, what happens next to the world of Bitcoin, cryptocurrencies, and the blockchain in general could be anyone's guess.
Read more about the perils of investing in BitCoin in Risk.news.