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FBI Bitconnect Trail Invstigate Red Blue Yellow

The FBI Might Need You to Help them Investigate the BitConnect Case

Reading Time: 2 minutes by on February 23, 2019 Blockchain, Crime, News

According to a notice published February 20, 2019, the Federal Bureau of Investigation (FBI) is seeking a response from investors who lost money due to the now-defunct cryptocurrency exchange platform BitConnect.

The FBI Wants You

The controversy surrounding the digital token issued by BitConnect is something the industry would want to erase from its short history.

Per the notice published by the federal agency, people who were financially invested in the BitConnect coin (BCC) can provide their inputs to the FBI by answering a few questions. The FBI hopes to gather key information to pursue its investigation in the multi-billion-dollar fraud.

(Source: bizfluent)

In its official notice, the FBI stated that responses provided by users would be “useful” in the federal assessment of the matter. Depending on the response submitted, the FBI may try to contact the respondent to collect additional information.

The notice reads in part:

“BitConnect guaranteed investors up to a 10 percent total return per month on their investment, following a tiered-investment system based on the sum of an investor’s initial deposit. The entire market for BCC crashed in late January 2018, after two U.S. state-level securities regulators issued public letters warning investors of the Ponzi-type nature of BitConnect.”

BitConnect Story Rewind

BitConnect was an open-source cryptocurrency exchange platform founded in February 2016. At its peak, the exchange boasted a market cap of more than $2.5 billion.

However, the exchange didn’t quite hit the right chord with the regulators, as on January 4, 2018, it received a cease-and-desist order from the state of Texas. The troubled exchange received another cease-and-desist order from the state of North Carolina on January 9, 2018, which prohibited it from going ahead with its scheduled BCC token sale.

Unsurprisingly, the token’s value took a deep dive in the market as a result of the aforementioned legal injunctions. The BCC coin fell from over $400 to less than $20 in early 2018.

The dramatic free fall in the token’s value took investors by surprise as they saw their money vanish in thin air. Soon, the exchange was sued by a number of angry investors seeking restitution for the lost money. Seeing their entire capital erode in a matter of days, the exchange closed in January 2018.

The magnitude of the BitConnect fiasco can be measured by a couple of instances that took place in India and Australia.

BTCManager reported on June 3, 2018, how the BitConnect promoters were attacked by enraged investors in India.

Similarly, on January 9, 2019, reports emerged how the Australian Securities and Investments Commission (ASIC) requested the Federal Court to place a travel ban on an Australian BitConnect promoter.

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