BitConnect is shutting down its lending and exchange platform. The company made the announcement in a press release yesterday, ascribing the decision to persistent bad press, including accusations from Vitalik Buterin, co-founder of Ethereum and Bitcoin Magazine, of being a ponzi scheme, and cease and desist letters from security boards in Texas and South Carolina.
BitConnect made a splash in late 2016 with a promise that it could make investors a one-percent daily return of investment. Backed by a shady referral program and a forceful marketing campaign, the platform managed to attract a large user base. At its height, BitConnect reached a value of $400.
Despite assurances from the company that outstanding loans will be repaid, many of its users will see substantial financial loss. The shutdown renders BCC, the token that powered BitConnect’s platform useless. Within hours, BCC plunged to a mere $37, a more than 80% drop in value. It is unlikely that the price can recover.