Texas regulators ordered BitConnect to cancel token sales

nComment: Recently, the Texas Stock Exchange (TSEB) released news on its website that it has ordered BitConnect, a blockchain-based financial system startup, to cancel its proposed tokens launch on January 10. According to the agency, BitConnect claims that the to-be issued token will yield a 100% annual return, and TSSB concludes that its token is in unregistered securities. Meanwhile, the agency’s statement also said BitConnect did not release any information about its financial position, profitability or exact location. It is noteworthy that in this statement, the agency also warned against the prevailing risk of cryptocurrency.n
nTranslation: Clovern
The Texas Stock Exchange (TSSB) has ordered BitConnect, a blockchain-based financial system startup, to cancel its proposed tokens launch on January 10.n
According to a press release posted on the regulator’s Web site, BitConnect claims to issue a 100% annual return of tokens, while TSSB finds the token to meet unregistered securities standards.n
In addition, BitConnect is looking for new members to promote its tokens, while Texas regulators identify those agents as unregistered securities sold in Texas.n
TSSB said these sales agents are primarily “resident in Texas” as well as residents of other states.n
On January 1, BitConnect announced the launch of its first digital token distribution (ICO) project called BitConnectx on January 10. It is noteworthy that the start-up had launched a token sale in 2016.n
This order from the Texas regulator, albeit from state agencies, highlights another example of the U.S. regulators being examining cryptocurrencies that could be considered as issuing unregistered securities through the token offering process.n
Earlier, the Securities and Exchange Commission halted Munchee’s tokens issuance, and the project later returned a refund to investors.n
In addition, the statement issued by TSSB also shows that BitConnect does not share any information about its financial position, profitability or exact location.n
According to the press release, however, this did not prevent the company from claiming that its token sale was a safety investment.n
According to data from CoinMarketCap, existing BitConnect tokens (called BCC) are currently trading for only $ 400, with a market value of $ 2.5 billion as of Friday. Over the past week, the token mechanism has been declining from a high of 460 dollars as of December 30, 2017.n
The press release from the Texas regulator also includes a warning about universally cryptocurrencies:n
n”Investing in cryptocurrencies is associated with significant risk due to regulatory and legal measures, competition with other cryptocurrencies, and the volatility of many cryptocurrencies.”n
nBitConnect did not comment immediately.n

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