A cryptocurrency investment scheme that last month drew the ire of state regulators in Texas announced last week that it was closing its lending platform.
DavorCoin, as previously reported, was likened to BitConnect by the Texas State Securities Board (TSSB) given that both involved the use of a lending site and had promised to pay steady interest income to those who invested. On Feb. 2, the board issued a cease-and-desist to Davorcoin, alleging at the time that those behind the scheme had intentionally hidden information from would-be stakeholders.
"The emergency order found that DavorCoin is telling investors they can earn lucrative profits by investing in a lending program based on a new cryptocurrency known as davorcoin. Investors allegedly purchase davorcoin and then lend it to DavorCoin," TSSB wrote at the time.
Less than a week later, those behind DavorCoin announced that they were closing the associated lending platform because of a plunge in the value of the scheme's DAV token.
According to data from CoinMarketCap, the price nearly hit $180 just over a month ago, but by the day of the announcement, the value of DAV was around $3. Press-time data indicates that DAV's value has plunged even further, coming in at roughly $0.03 at press time.
The team wrote in the Feb. 7 blog post:
"There is no doubt for us that the DAV value has been negatively affected by our lending program because the crypto-environment has dramatically changed recently. We did everything possible to protect our platform and our amazing community. However, DAV price still went from $180 to $0.5 in 20 days. As a result, we have decided to change our strategy and to end our lending program that has become the only reason why DavorCoin is decreasing in value."