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Bitcoin: Bitconnect Fears, Scams Crash Cryptocurrency Prices | Fortune


Bitcoin and cryptocurrency prices deepened their weeks-long rout Wednesday as a spate of hacks and scam warnings compounded fears that regulators would crack down on the nascent digital assets. The price of Bitcoin crashed to well below $10,000, plunging to as little as about $9,200, down more than 50% from its highs a month ago.

Spooking investors was an announcement late Tuesday by Bitconnect, a popular but controversial site for trading and lending cryptocurrency, that it was closing down operations. Bitconnect had recently been accused of running a Ponzi scheme—the financial fraud most famously perpetrated by Bernie Madoff—by several influential investors, including Ethereum co-founder Vitalik Buterin and billionaire cryptocurrency investor Mike Novogratz. (The company didn’t respond to the accusations.)

Some Bitconnect clients interpreted the abrupt shutdown as confirmation of those suspicions, and worried they would not be able to withdraw their money if the exchange, whose management team remains anonymous, became insolvent. While Bitconnect, whose own digital token had risen to more than $2 billion in market value as recently as last week, promised that investors would be able to withdraw their funds at an average of the cryptocurrency’s recent exchange rate, doubts persisted. Bitconnect’s own cryptocurrency quickly lost as much as 90% of its value.

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Bitcoin: Bitconnect Fears, Scams Crash Cryptocurrency Prices | Fortune.