US Regulators Issue Second BitConnect Cease-and-desist letter this month. The company has 30 days to respond to this letter. How will the situation unfold?
12 January, AtoZForex – The planned initial coin offering (ICO) of BitConnect has received another cease-and-desist letter from the US regulatory bodies. This letter has marked the second instance this month that BitConnect receives the cease-and-desist warning.
US Regulators Issue Second BitConnect Cease-and-desist letter
Earlier this January, the US regulators from the North Carolina Securities Division have issued the temporary cease-and-desist letter to BitConnect. That time, the regulator has stated that BitConnect did not undergo the necessary registration. Thus, it had no authority to deal or sell securities in the Tar Heel State.
As per the release, the division has stated that BitConnect has had intentions to sell unregistered securities in their initial coin offering. The latter was scheduled to take place on January 10.
The release further reads:
“The Temporary Order to Cease and Desist found that BitConnect was not registered as a dealer or salesman of securities in North Carolina and offered investments called the BitConnect Lending Program and the BitConnect Staking Program. The Temporary Order to Cease and Desist also found that BitConnect had omitted to disclose material facts when offering these investments in North Carolina.”
What now for BitConnect?
As of the moment, BitConnect has 30 days to react to the letter, as it is stated in the temporary cease-and-desist note. In case the company will fail to do so, the temporary order will turn permanent, the release states.
Earlier last week, the Texas State Securities authorities have issued a similar release in regards to BitConnect. In fact, some of the industry insiders have been accusing BitConnect of constituting a Ponzi scheme, reportedly.
The Texas Securities Board has also issued a temporary cease-and-desist order. The regulatory body has also stated that cryptocurrencies are “risky investments.”
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