BitConnect Under Fire from UK Authorities

So-called Bitcoin investment platform BitConnect (BCC) has come under scrutiny from UK authorities. The company has been threatened with closure as well as having their assets seized if they’re unable to prove that they are not a ponzi scheme. Failure to provide evidence of “cause to the contrary” would result in the UK Registrar of Companies forcing the closure of BitConnect.

This is the official correspondence from the UK Registrar of Companies:

The news comes just a week after the Ethereum lead developer Vitalik Buterin Tweeted out his own opinion of the investment platform. The founder of the second largest cryptocurrency was ruthless in his assessment. Replying to another user who had quoted the company’s potential return rates to investors, Buterin stated:

Yeah, if 1%/day is what they offer then that’s a ponzi.

The notice from Companies House is not targeted at any individual. However, TheNextWeb reports that the company, BitConnect, was registered by a British man under the name Ken Fitzsimmons. Interestingly, the name doesn’t appear anywhere within BitConnect’s own literature leaving the community with considerable doubt about the legitimacy of the platform. TheNextWeb do allege that whoever Fitzsimmons is, they’re in possession of at least 75% of the total BitConnect shares.

According to industry price analysts Coinmarketcap, as the news began to circulate amongst the crypto-community on Reddit, the market price of each BitConnect Cash (BCC) token fell from $287 to less than $230. It has since regained some of the losses, however, and currently sits around $253.

Vitalik Buterin and the UK Registrar of Companies’s opinion about BitConnect has long been echoed within the wider cryptocurrency community. One member even went as far as to report them to the UK company investigation service earlier this year. It’s hardly surprising that so many have their doubts about the company. They’re known for arranging various meet ups with little content or insight. Instead, they prefer an embarrassing level of showiness. In response to a recent networking event in Thailand which featured acrobatic performers of all things, one guest claimed that they “could not stop laughing”.

A quick look at the BitConnect’s marketing materials raises yet more red-flags for savvier investors. The most brazen of all perhaps is a pyramid info-graphic depicting different percentage awards depending on the “level” of member a user is. It’s little wonder therefore that the UK have given BitConnect an ultimatum. However, how easy it is to reclaim any assets and stop a company as mysterious and potentially fraudulent remains to be seen.

Image: TheSun

 

 

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