Cryptocurrency traders in North Carolina have hit their first major roadblock: BitConnect’s investment operations are being prohibited in North Carolina.
BitConnect is a foreign technology organization that offers trading in its own digital currency, BitConnect Coin.
The North Carolina Secretary of State’s office issued a temporary cease and desist order against BitConnect on Thursday, for selling securities in North Carolina without being registered to do so in the state. That is a violation of the State Securities Act.
BitConnect requires users to buy Bitcoin and then exchange the Bitcoin for a BitConnect Coin. Investors then “lend” their Bitconnect Coins back to the company to fund “the trading activities of the proprietary, secret trading system that it calls ‘volatility software,’ ” according to the Secretary of State’s office.