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BitConnect Shutdown Triggers Blood Bath For Investors

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Bitconnect

Controversial cryptocurrency exchange, BitConnect, has announced plans to close down its lending and exchange platform triggering a bloodbath for investors. The move follows a spate of accusations from high profile figures, who have accused the company of operating a Ponzi scheme.

News of BitConnect imminent shutdown has sent fears in the cryptocurrency investment community, triggering a sell-off that shows no signs of slowing down. While most cryptocurrencies have been on a bear market, the situation has become worse in the recent past, seen by most cryptocurrencies prices plunging by more than 40%.

Cease & Desist Orders

Cease & desist orders, issued by regulators in Texas and North Carolina accuse BitConnect of engaging in the illegal sale of unregistered securities.

The letter from Texas accuses the company of defrauding and misleading investors. Authorities in North Carolina, on the other hand, have taken a swipe of the company’s purported 3,000% returns, which they maintain not realistic given the company’s core business

In response to the orders, BitConnect issued the following statement.

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

In November, the company was ordered by UK authorities to prove its legitimacy or face dissolution, a further indication that regulators around the world were becoming skeptical about its practices. The company had promised early investors that they would earn interest on lending bitcoins. It had also tried to entice new customers by loaning those Altcoins of its native currency, BCC.

According to the company, the cease & desist orders have made it impossible for the legal continuation of the platform. However, that appears not to be the case. The company is yet to address the many DDoS attacks that have plagued its website rendering it impossible for investors to withdraw their money.

BitConnect also operated a multi-level referral program that had the same features as a pyramid scheme as thousands of social media users tried to drive their sign-ups.

Another red flag in the company’s operations is the fact that it is yet to disclose a purported secret sauce, which it claims helps investors generate significant returns. The company has been touting an anonymous ‘trading bot’ that makes profitable trades and then shares dividends with investors.

Amidst the selloff, BitConnect says it will move forth with a proposed Initial Coin Offering. The company also plans to build an alternative exchange for its BitConnect token.

The sentiments have not gone well with current coin owners who continue to take a swipe at the company on social media networks terming it a Ponzi scheme. Some of the high profile personalities to take a swipe at the company include Ethereum founder Vitalik Buterin who insist its core business is a scam.

In a posting on its official website the company says it will bounce back once the bad press that has eroded its credibility cools off. It is still unclear whether BitConnect will come through on the proposed projects given that DDoS attacks are commonly used by controversial online marketplaces planning to exit a scam.

Cryptocurrency Bloodbath

BitConnect native currency, BCC, which touched highs of $400 early this year has since shed more than 90% in value after dropping below the $10 mark. The plunge has had a ripple on the entire industry as Bitcoin plummeted below the $10,000 mark for the first time, after touching record highs of $20,000 last month. Ethereum has also touched lows of $820 after hitting highs of $1,422.

Scammers have started to take advantage of the confusion that has gripped BitConnect users. Some accounts have cropped up on Twitter, presenting themselves as BitConnect customer support. One such account is @BitconnectStaff, which is tricking unsuspecting users into handing over details of their cryptocurrency wallets.

@BitConnectExch, on the other hand, is preying on users who wish to get their money out of the exchange by asking them to send all their cryptocurrency to a separate digital wallet.

Mt.Gox Comparison

The potential collapse of the popular trading platform has also drawn parallels from Mt.Gox, a favorite cryptocurrency exchange that went down in 2014

Mt.Gox collapse triggered a ripple effect resulting in bitcoin losing more than 70% of market value. Its failure has always been attributed to embezzlement and mismanagement. The fact that BitConnect investors are also finding it hard to withdraw their investments from the platform is eliciting suggestions that history could be repeating itself.

BitConnect ongoing woes echo a broader cryptocurrency crisis triggered by an uptick in regulatory scrutiny around the world. South Korea and Chinese regulators have already hinted at the possibility of cracking down on cryptocurrency mining and trading. Russia is also considering implementing some restrictions on cryptocurrency trading.

The BitConnect collapse all but continues to arouse concerns about the future of cryptocurrency investing. Even before the dust on hacks and scams settles down, worries about imminent crackdowns in some of the most significant cryptocurrencies market continue to exacerbate the situation.

We will be updating our subscribers as soon as we know more.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Image courtesy of Stacey Youdin via Flickr

Crypto

BNB Price Surges Past $300, Faces Crucial $339 Hurdle: What’s Next?

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BNB price has noted significant gains over the past few days, surging past the psychological resistance of $300. The native cryptocurrency of the Binance Exchange has surpassed Solana to regain its position as the fourth-largest cryptocurrency by market cap. The digital currency has been rallying lately with a 7-day profit of more than 15%. Additionally, BNB has clocked a phenomenal gain of 38% in the month to date.

Binance Coin Outlook

BNB price has been on a strong bull run for the past week, breaking out of its consolidation. Even so, the asset has experienced a correction in its uptrend over the past 24 hours but remains above the crucial level of $300. BNB’s total market cap has decreased by 4% over the past day to $48 billion, while the total volume of the asset traded over the same period dipped by about 15%.

Over the past year, Binance Coin has had to cope with Fear, Uncertainty, and Doubt (FUD)  on the back of the regulatory troubles of its underlying exchange. Earlier, the BNB price touched a low of $223.50, a few days after its former CEO, Changpeng Zhao, pleaded guilty to money laundering charges. However, the cryptocurrency has managed to rebound 46% in value since then.

The recent price rally has been associated with various positive developments in the Binance ecosystem, including the Introduction of the Isolated Margin Auto-Transfer Mode. This feature enables…

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Altcoins

Solana Price Surges Beyond $100, Dethroning Ripple and BNB To Secure Fourth Place

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Solana price performance in recent times has been remarkable, surpassing Ripple and Binance Coin to become the fourth-largest cryptocurrency by market cap. The SOL price breached the critical level of $100 for the first time since April 2022 over the weekend to imbue optimism among investors. However, the altcoin has corrected by 7%, suggesting that the market is overheated. At the time of writing, the ‘Ethereum killer’ was trading slightly lower at $111.60.

SOL Outlook

Solana price has made a significant recovery over the past few weeks, climbing above the psychological level of $100. The altcoin has been one of the best-performing assets this year, extending its year-to-date gains to more than 1,025%, with more gains recorded in the past month alone. However, even with such growth, analysts have noted that Solana has a bleak chance of topping its ATH of $260.

The reason behind this is the increase in supply relative to its value. In November 2021, when the Solana price hit its all-time high of $260, its total market capitalization was around $78 billion. Despite the value of the crypto asset being less than half of what it was at the top, its market cap is currently hovering near $50 billion.

This has been brought about by the increase in the Solana supply by more than 100 million SOL over the past two years. According to some analysts, for the altcoin to retest $260, its…

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Altcoins

Solana Price Skyrockets to 20-Month Peak Amidst Memecoin Frenzy

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Solana price has noted significant gains over the past few weeks, climbing to its highest level since April 2022. The ‘Ethereum Killer’ almost topped the crucial level of $100 on Friday, before pulling back slightly. The asset’s recent surge has catapulted Solana’s total market cap to $39.6 billion, ranking 5th after and above BNB and XRP, respectively. Solana has jumped by more than 22% in the past week and more than 80% in the month to date. At the time of writing, SOL price was trading 0.90% lower at $93.10.

Catalysts Behind SOL’s Rally

Solana price has been on a strong bull run over the past few days, rocketing to its highest level in 20 months as the network benefits from the substantial activity and strong interest in memecoins. The SOL token, the native digital asset of the high-performance blockchain platform Solana, has shown some serious strength over the past few weeks, outperforming all the altcoins in the market.

The recent surge in the Solana price has been linked to heightened on-chain activities on the Solana blockchain. Notably, the ongoing hype for the blockchain’s speedy transactions, cheap fees, and a lottery of meme coin issuances has buoyed SOL’s on-chain activity. Metrics have revealed that Solana has been the strongest draw among on-chain traders, with trading volumes and network fees outperforming Ethereum- the largest altcoin by market cap.

Cited figures provided by DeFi aggregator DeFiLlama

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