BitConnect Shut Down: Bitcoin Trading Platform Stops Services

Controversial cryptocurrency trading platform BitConnect announced Tuesday that it would cease operation of its lending and exchange programs after a number of complaints have been levied against the company.

In a statement published on the company’s website, BitConnect announced “changes coming” for its system, including the “halt of lending and exchange platform.” Going forward, BitConnect will serve as a “wallet service” as well as offer “news and educational purposes.”

Users of BitConnect have started to receive notification of the shut down, which includes the release of all outstanding loans that were issued through its platform. The company announced that it will transfer all lending balanced to the BitConnect wallet service, which can be used to house cryptocurrencies. The lending service itself has already closed down entirely.

BitConnect’s now defunct lending system allowed users to take their existing Bitcoin, convert it to a token called BitConnect Coin, and receive interest payments on earnings from that token. The returns were not guaranteed but BitConnect often promised the system produced interest of around one percent per day in its promotional material.

The promise of consistent success from the platform, which traded in its own token, resulted in some skepticism from users and observers. Some even accused BitConnect of operating a ponzi scheme .

BitConnect’s own actions did little to dissuade the suspicious of potentially fishy activity. The site was regularly down at inopportune times. Operators of BitConnect claimed it was regularly the target of distributed denial of service attacks but were not able to thwart the efforts or provide any sort of protections for its users.

BitConnect also began to draw the ire of regulators who viewed the platform as a potential scam.

The Secretary of State for North Carolina issued a temporary cease and desist order against BitConnect last week for selling securities in the state without permission. Last year, the United Kingdom’s Registrar of Companies revealed the British Companies House sent a warning to BitConnect that threatened to shut down the site’s entire operation.

In a statement regarding the shut down of its lending and exchange platforms, BitConnect cited legal pressure and cyber attacks as two of the primary forces that drove its decision. The company also claimed that bad press harmed its operation and eroded trust in the service.

The news has done no favors for the BitConnect Coin, the token created by the company to operate its lending service. It was valued at around $300 prior to the announcement that the lending platform would shut down. It has since dropped to about $30 .

Despite the drop, BitConnect said it intends to continue to support its coin. “Closing the lending platform will allow BitConnect Coin to be listed on outside exchanges, giving more options for trading,” the company said in a statement.