The UK based Bitconnect has attracted the ire of the securities agency in the state of Texas after it announced that it would launch an ICO for BitconnectX. The company has been promoting the ICO to Texans in recent weeks which may have brought them under the scrutiny of regulators. The company had planned to issue the new coin in addition to the BCC which it had already pushed to the market and claims is worth around $400.
Bitconnect claims that its market cap is worth up to $4 billion or the equivalent of the ICO market capitalization as at 2017. The company promotes itself as a decentralized peer to peer platform meant for storage of wealth. They have promised investors profits of more than 100 percent, reasons why their activities may have attracted the interest of regulators in Texas.
The company markets its services to Texas residents as well as residents of other states. Regulators are concerned about the possibility that the Bitconnect coin is an unregistered security in the state of Texas.
Another concern with the regulators is that the company is a lending platform that promises returns of 40 percent monthly without disclosures on how profits are generated. The company’s issue with the Texas regulatory agency may also not be unconnected also with the fact that Bitconnect is based abroad but has no known physical address.