Cryptocurrency BitConnect Breaks Records in Value and Market Cap
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The Securities and Exchange Commission is warning investors about the potential for volatility and fraud in new cryptocurrency products. If you're tempted to join the cryptocurrency bandwagon, regulators say you should take a pause before you click "buy. In January, Kodak saw its shares rise on the announcement of its "KodakCoin" digital currency.
Even Venezuela is making moves into digital money, with President Nicolas Maduro announcing the development of a "petro cryptocurrency" backed by the country's oil and gas reserves.
But where some see opportunity, regulators are preaching caution. Last week, the Securities and Exchange Commission shot down proposals from two exchange-traded funds seeking to offer investors a way to trade in cryptocurrencies on more traditional exchanges. ETFs have bitconnect newsbitcoin features product trading cryptocurrenci in popularity in recent years and offer a simple way for individuals to diversify their investments. The funds hold a basket of investments, and investors can then buy and sell the ETFs like normal stocks.
In this case, the two funds proposed investing in cryptocurrencies. They would allow investors to trade shares of the funds, with fund managers handling the selection and purchase of the underlying crypto assets in their portfolios. Cryptocurrency markets feature "substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation," SEC Chairman Jay Clayton said in December. For the SEC, cryptocurrencies are still too new and poorly understood to allow them onto more conventional exchanges.
Bitconnect newsbitcoin features product trading cryptocurrenci the agency's reluctance to allow crypto trading on stock exchanges has done little to curb investor enthusiasm. Aspiring investors can still trade bitcoin and other currencies on a host of online exchanges. Investors can also participate in "initial coin offerings," where new coin developers sell their digital coins in exchange for startup capital. The SEC is not so sure.
Crypto investors do not need to look far to see what the SEC is warning about. Last week, BitConnectan online platform that guaranteed returns of up to 40 percent per month, collapsed.
BitConnect failed shortly after receiving cease-and-desist orders from authorities in North Carolina and Texas. Some prominent figures bitconnect newsbitcoin features product trading cryptocurrenci cryptocurrency, including Ethereum co-founder Vitalik Buterin and hedge fund manager-turned-crypto-investor Michael Novogratz, called this "too-good-to-be-true" venture a Ponzi scheme.
Over the course of a few days, BitConnect's coin lost more than 90 bitconnect newsbitcoin features product trading cryptocurrenci of its value. Investors were left with no way to withdraw their funds as the platform announced that it was shutting down.
Those who could found that their investments had shriveled to a fraction of their initial value. The problem isn't limited to BitConnect. These attacks exploit flaws in the code of new cryptocurrencies, many of which are rushed to market without meaningful review.
It's often impossible to recover stolen funds because blockchain transactions are irreversible. Despite the risks, investors continue to flock to ICOs and projects that utilize blockchain technology. As for BitConnect, representatives of the company bitconnect newsbitcoin features product trading cryptocurrenci not responded to multiple NPR requests for comment.
But they have announced that they are still going forward with an ICO for a new project, BitconnectX. Whether any investor will still trust them remains to be seen. Accessibility links Skip to main content Keyboard shortcuts for audio player. Regulators warn of potential "fraud and manipulation" in proposed funds. Facebook Twitter Flipboard Email. January 25, 2: South Korea Wants To Know.
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