Investors into BitConnect have filed a class action lawsuit looking for reimbursement from the company after they shut down on January 17.
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BitConect issued cryptocurrency tokens that were unregistered securities and capitalized on additional backing through a “wide-ranging Ponzi scheme,” according to the class action complaint.
Six individuals have filed a complaint on their own behalf stating the losses of the six plaintiffs amount to $771,000.
BitConnect guaranteed 40 percent returns monthly to investors by promising to trade the received funds into cryptocurrencies.
The plaintiff’s claim the company instead used the funds to meet the expectations of the existing ones.
BitConnect launched February 2016 and launched its own cryptocurrency, Bitconnect Coin (BCC) in November 2016.
In December 2017, BitConnect was worth a high of $476.01 and hit a market capitalization of $2.9 Billion, according to CoinMarketCap.com.
Today, BitConnect has a market cap of $118 Million and is worth $12.72.