Investors of BitConnect have filed class action case after its abrupt closure last week and are fighting to get back their funds.
After receiving two cease-and-desist orders from U.S. state regulators, BitConnect was brought to sudden shut down. Its investors are trying to get their funds back they put in the company.
The Class Action case was filed on january 24 2018 in Southern District Court of Florida alleging that BitConnect issued cryptocurrency tokens that were effectively unregistered and collected more funds, turning it into a “Ponzi Scheme”.
The document states that BitConnect launched several programs that asked the investors to send cryptocurrencies to buy BitConnect Coin that is generated on the platform.The platform promised the investors that they will use these funds to generate monthly returns of 40 percent or daily compound rate of 1 percent.
The document also mentions a statement directly taken from the website,
“This investment option involves profiting from BitConnect trading bot and volatility software. You will receive daily profit based on your investment options. Upon investment term completion, you will receive your capital back to take out from the BitConnect lending platform or optionally reinvest back in lending platform to continue receiving daily profits.”
The plaintiffs yet believe that BitConnect could have used in cryptocurrency trading but only gone ahead with Ponzi Scheme. After its closer, the price of the token took a plunge by 90 percent.