The next phase of revenue generation for the BitConnectX Ponzi scheme was to launch BitConnectX as an ICO.
Making absolutely no sense considering BitConnect already operates the BCC cryptocurrency, BitConnectX is widely seen as a last-ditch cash grab.
Gullible affiliates are buying it though, with most investors willing to ignore warning signs and invest anyway.
An unexpected spanner in the works for the BitConnectX launch was the Texas Securities Board emergency cease and desist last week.
So far BitConnect has shown no interest in registering itself with US securities regulators, which would require the company to disclose evidence of external ROI revenue.
Instead BitConnect has stopped investment from Texas-based affiliates, although as far as I’m aware they’re still receiving daily ROI payouts (for now).
BitConnectX was scheduled to launch earlier today, with the company since delaying the launch timer featured on the BitConnectX website.
A FAQ for the ICO reveals that in the wake of the Texas cease and desist and likelihood of an SEC investigation, US residents are prohibited from investing in BitConnectX.
This is the strongest indication yet that BitConnect are operating fraudulently.
ICOs are not illegal in the US, however companies offering attached passive investment opportunities must register with the SEC in order to make the offering legal.
BitConnectX’s abrupt announcement is likely to dampen US investment into BitConnect vanilla. In the wake of the Texas cease and desist, many US BitConnect affiliates were looking toward BitConnectX as a sign that the company would continue to operate normally.
At the time of publication the US is easily the biggest source of traffic to both the BitConnect (20%) and BitConnectX (22%) websites.
There is also speculation that while BitConnect are advertising acceptance of BCC to invest in BitConnectX, that this will be short-lived – once again requiring affiliates to invest new bitcoin and litecoin to keep the scheme going.
Now with the US banned from investing in BitConnectX, the question is how much longer will US affiliates be able to invest and receive payments in BitConnect vanilla?
Since the Texas cease and desist the value of BCC has steadily declined. Seeing as upwards of 90% of BCC trading is done through the company’s internal exchange, typically when this happens BitConnect manipulate the price by suspending sell orders and injecting invested funds back into the exchange (internal buying).
This can be observed by sudden spikes in value on BCC charts. Strangely enough though this has yet to happen since the Texas cease and desist.
BCC’s current value is $350, down from $425 when the cease and desist was issued last Friday.
BitConnect are hoping to flog BCCX points to gullible investors for $5 each.