Bitconnect Refunding Scam Surfaces, Texas Securities Regulator Warns

Fraudsters are using a false TSSB notice to deceive Bitconnect victims by collecting a $250 fee for fake compensation initiatives.

Texas State Securities Board (TSSB) has sounded the alarm over the partial revival of Bitconnect, the now-defunct famous cryptocurrency Ponzi scheme. The fraudsters are claiming that TSSB has begun a refunding initiative for the scam victims, the regulator said on Friday.

The fake notice claims that Bitconnect investors who pay a $250 fee will get around 35% of their money back. The so-called “Bitconnect update” has been published on a website that mimics the official internet page of TSSB. For questions, victims should use the encrypted messaging platform of Telegram, the notice explains. In reality, the Texas regulator gives official consultations via phone, fax, online form, or by post with the publicly announced contact details on its website.

The fake notice reads:

“However, the refund which is expected to commence by mid December 2018 might face a little hiccup as refunds can not be made to user’s Bitconnect coin wallet due to the Emergency Cease and Desist Order.

Secondly, refunds cannot be paid randomly to all participants as some might have forgotten or no longer have access to their dashboard which is a prerequisite for confirmation of participants total investment earned as against the total fund invested.”

TSSB shut down Bitconnect at the beginning of this year, as it had been illegally offering unregistered securities and had been “engaging in fraud.” The pyramid scheme was claiming between 10% to 120% returns for investing in the company’s Bitcoin (BTC)-based lending program. It sold 9.4 million of its tokens, Bitconnect Coins (BCC), till January 3, 2018, according to TSSB.

“The facts are these: The Securities Commissioner issued an Emergency Cease and Desist Order against BitConnect on Jan. 4, 2018. The Order has since become final and remains in full force and effect because BitConnect failed to timely request a hearing to attempt to modify or vacate the Order,” Texas Securities Commissioner Travis J. Iles said.

The Bitconnect investigation is still underway. In October, Silver Miller, the law firm that took up complaints from BitConnect victims, once again consolidated complaints into a new filing.

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