An Australian-based company, BitConnect, made an announcement on its website on January 16th that it was closing down its lending services and cryptocurrency exchange platform. The lending service was to be closed with immediate effect, and the exchange platform five days thereafter, the site posting said, although the site would still function for servicing wallets, providing news and \"education.\"

Many factors contribute to the closure, the announcement continued, with possibly the strongest motive being the legal actions taken by regulators in the United States. The State of North Carolina and the State of Texas have both issued letters instructing the company to Cease and Desist trading, stating that BitConnect is dealing in unregistered securities.

BitConnect confirmed that they had received Cease and Desist notices from the State Securities authorities in Texas and North Carolina. The notices state that the company is engaged in selling unregistered securities, anchored to a token sale, and set an obstacle in the way of BitConnect legally continuing to provide their services.

The web posting also claimed that bad press was making members of the cryptocommunity uneasy, and inspiring lack of confidence. DDOS attacks on their site (dedicated denial of service) also contributed to the closure. However, the company intends to continue with its present ICO and is going to build an alternative exchange.