BitConnect shuts down, cryptocurrencies take a tumble

Reuters/Benoit Tessier/IllustrationA Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017.

BitConnect, one of the most controversial coins and exchanges in the cryptocurrency world, shut down all operations on Tuesday, Jan. 16, following a series of online attacks and cease and desist orders from state authorities in Texas and North Carolina.

BitConnect, one of the top 20 tokens coming out of 2017, has been a target of criticism and skepticism for its multi-level marketing structure. The platform offered the option for investors and holders to receive an interest of as much as 40 percent on their digital coin balance by lending their invested capital. It has been criticized as a "ponzi scheme" by experts including Fund Manager Mike Novogratz and Ethereum Co-founder Vitalik Buterin.

In an official statement by BitConnect, it has said that it will be reimbursing investors for their lending wallet amount at the exchange rate high of $363.62. Despite this, holders of the coin are struggling to sell and trade the coin at the current rate of $38.30, as of the time of writing, according to CoinMarketCap.com.

Other cryptocurrencies suffered a two-day crash as a result of the controversy, with BitCoin hitting a low of $9,511.29. Other currencies suffered the same fall as traders saw a large dip all across the board. BitCoin has since recovered with a high of $11,528.60 as of the time of writing, which is still a far cry from its December high of $19,753. Other tokens have since recovered from the slump and have seen some very promising gains as Ripple jumps up by a huge 43 percent, and Tron by 99 percent.

The future of cryptocurrency remains unknown as authorities from different countries try to take hold of the industry and impose tighter regulations. Public skepticism is present now more than ever following the global fluctuation and BitConnect controversy. In the United States, the Securities and Exchange Commission blocked the launch and initial coin offering of Munchee, Inc. after it was found to have offered unregistered securities, according to a recent article by Bloomberg.

 

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