BitConnect’s ‘Crypto-Wonderland’ Hit With Investor Lawsuit
- Complaint says thousands lost money in ‘wide-reaching’ scam
- Digital currency cratered after state regulators intervened
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A group of investors sued BitConnect, alleging that the cryptocurrency exchange platform was a “wide-reaching Ponzi scheme” and seeking potentially hundreds of millions of dollars in damages.
BitConnect invited people to exchange their Bitcoins for its own digital currency. Those coins would subsequently be lent out, and investors would collect the interest. But according to a class action complaint filed Wednesday in federal court in West Palm Beach, Florida, “things at BitConnect weren’t what they seemed to be.” The site’s promoters “illogically promised” monthly returns of 40 percent, and 1 percent compounding interest daily, regardless of market performance, the plaintiffs said.