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Bitconnect Assets Frozen | Lawsuit Piles Up for this Ponzi Scheme?

Bitconnect Assets

If closing its platform and being hit with a lawsuit weren’t enough for BitConnect, the U.S. District Court, Western District of Kentucky, has granted a temporary restraining order against the company and has frozen all Bitconnect assets following a second lawsuit filed on Monday against the cryptocurrency exchange platform. Both lawsuits alleged that BitConnect was a Ponzi scheme with its promoter Ryan Massen pointed out specifically in the lawsuit.

>>BitConnect Was A Ponzi Scheme, Alleges Lawsuit

The order issued to BitConnect requires the disclosure of all the crypto wallet and trading account addresses as well as identities of anyone to whom BitConnect has sent digital currencies within the past 90 days.  BitConnect now has 10 days to comply with the order.

The most recent lawsuit, filed in Kentucky on behalf of every BitConnect investor, noted that Bitcoin and other cryptocurrency assets had been converted into BitConnect Coin (BCC) when the company announced the shutdown two weeks ago. BCC, which was trading at more than $300 at the time, now sits at around $9.

According to the complaint filed by Kentucky resident Brian Paige:

“Bitconnect scammed thousands of Kentuckians and hundreds of thousands of Americans out of millions and millions of dollars through a website called bitconnect.co.”

The class action points out defendant and BitConnect promoter Ryan Maasen, who is said to have used YouTube videos to “convince people to deposit money onto Bitconnect’s website,” which Paige and many others did. Massen deposited Bitcoin in exchange for fixed returns and a guarantee of the principal amount being paid in full at a later date.  The platform was promising fixed returns of as high as 40% monthly as well as daily returns of 1% — a classic warning sign for a potential Ponzi scheme, as many experts have pointed out.

>>BitConnect Officially Shuts Down — Ponzi Scheme Confirmed?

The court believes that enforcing the restraining order “is in the public interest because the public is interested in preventing massive consumer fraud and other security violations.” and is the only way the plaintiffs would recover their funds. 

Furthermore, the court sees that there’s a high likelihood of success on the plaintiffs’ side, noting the nature of the allegations and the existing arguments against BitConnect.

Featured Image: globalcoinreport.com

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In addition to writing financial content and analysis, Jackson has worked as a business journalist at Stockwatch and research analyst at various organizations. He obtained his MA Economics from Concordia University in Montreal and BA Economics from the University of British Columbia, with special emphasis on environmental and industrial economics.

About the author

Alma W. Hendon

Alma W. Hendon got into Bitcoin while completing his Master's degree and hasn't looked back since, writing about anything crypto-related which makes him sit up and pay attention.

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