Various divisions of the United States federal government have been cracking down on  Cryptocurrencies  Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. Read this Term over the last several months. Near the end of 2017, the SEC halted one ICO and filed charges against another for failing to correctly register their coins as securities.

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Now, a US regulator on the state level has taken action against a cryptocurrency that has long been regarded as a 'scamcoin' by much of the crypto community.

On January 4, Texas Securities Commissioner Travis J. Iles served the UK-based BitConnect with an Emergency Cease and Desist Order. The charges? Selling unlicensed securities in the state of Texas, failing to register as a dealer or agent of securities in the state of Texas, and recruiting  Affiliates  Affiliates Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition The broker pays only for the clients which end up opening an account. The affiliate marketer doesn’t get any compensation unless the lead ends up depositing. After the acquisition the broker kicks back a predetermined amount to the affiliate. The figure can be fixed or a percentage of a customer’s deposit.This is where CPC or Cost per Clicks come into play. This option is used to drive traffic to the broker’s website. The affiliate is getting paid regardless of whether the client ends up opening an account. Nowadays, this option is rarely used howeverIn the FX space, it is certainly possible to be successful affiliate marketer. However, you need to utilize websites with requisite levels of traffic. For many brokers, affiliate marketing is not their primary source of revenue as the results can be unpredictable and sporadic. Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition The broker pays only for the clients which end up opening an account. The affiliate marketer doesn’t get any compensation unless the lead ends up depositing. After the acquisition the broker kicks back a predetermined amount to the affiliate. The figure can be fixed or a percentage of a customer’s deposit.This is where CPC or Cost per Clicks come into play. This option is used to drive traffic to the broker’s website. The affiliate is getting paid regardless of whether the client ends up opening an account. Nowadays, this option is rarely used howeverIn the FX space, it is certainly possible to be successful affiliate marketer. However, you need to utilize websites with requisite levels of traffic. For many brokers, affiliate marketing is not their primary source of revenue as the results can be unpredictable and sporadic. Read this Term who are also not properly registered as dealers or agents.

Additionally, the order points out that BitConnect makes rather outrageous promises to its investors--users are invited to participate in “programs that the company claims will deliver annualized returns of 100% or more”.

Because BitConnect is based in the UK, Texas can do little other than ban the company from dealing directly with residents of Texas; the rest of the United States will be unaffected unless states decide to take individual action.

Red Flags: Anonymity and (a Lack of) Accountability

BitConnect has drawn a lot of negative attention from the cryptocurrency community at large. The company has some rather significant similarities with textbook-case multi-level marketing and Ponzi schemes.

For one thing, there are no names or faces anywhere on the BitConnect website. This is a red flag--the operators of an above-ground operation in the crypto space should have no issue revealing their identities. A lack of personal information in this regard could be evidence of illegitimate activity.

Additionally, there is no BitConnect whitepaper explaining how any aspect of BitConnect works. That being said, there does appear to be an actual BitConnect cryptocurrency. Often, crypto MLM schemes do not really even have a blockchain or any cryptocurrency to begin with.

BitConnect Asks Holders to Lock Currency into Its Ecosystem for Months at a Time

Besides the BitConnect token (BCC) that can be traded on at least five different exchanges, BitConnect offers a 'lending program'.

In this program, users deposit their Bitcoins onto the native BitConnect platform and trade them for BitConnect’s native token, BCC. The BCC tokens are then whisked away by 'tradebots' and who have allegedly been equipped with 'volatility software' to buy low and sell high. Participants in the lending program are promised high profits in exchange for the loan.

Additionally, BitConnect recruits affiliates to recruit users into buying BitConnect tokens and lending them to the system. Every time a recruited user lends their cryptocurrency to the BitConnect, the affiliate gets a commission.

BitConnect claims that the lending program can earn you up to 40% interest in a single month, or 600% a year. The catch, of course, is that once your money is in the system, you won’t see it again for at least 120 days. Loans ranging anywhere from the equivalent of $100 to $1000 stay locked into the BitConnect ecosystem for as long as 299 days.

What’s troubling is that there is no guarantee that BitConnect will return your tokens to you at all. The lack of names and faces means that any legal recourse for such a crime would be in short supply. Of course, we can operate on good faith and hope that BitConnect will do as it says that it will--however, good faith is not enough.

The old adage is just as true in the world of cryptocurrency as it is in the rest of the world: if something sounds too good to be true, it probably is.