Within the last week, popular crytocurrency HYIP platforms Bitconnect and USI-Tech closed (to US residents only in USI-Tech's case). They cited various reasons, the largest being cease-and-desist letters from the Texas SEC and the North Carolina Secretary of State Securities Division. These are just excuses. Neither state has direct legal jurisdiction over these international businesses; if Bitconnect and USI-Tech had legitimate businesses and half-decent legal teams, they would ignore or fight the orders. But instead, they used them as an excuse to exit their Ponzi schemes.
Their collapse was imminent anyway, so this is a decent way to deflect blame. Interest in crytocurrency has been taking a bit of a break since the start of the year and chances are, enough new victims weren't buying in to their interest-generating programs anymore to sustain payouts much longer. Add in the fact that crypto valuations have dropped substantially lately, and it's easy to assume funds were running out quickly.
Bitconnect decided to end its lending platform completely, liquidating all lending funds by converting them to their own coin, Bitconnect Coin (BCC), but at its average rate from the previous 15 days, which came to $363.62 per BCC. But predictably, a fire sale quickly commenced, and its value dropped over 90% in less than a day, so as of now, participants aren't getting much back. As an alternative to selling BCC on the cheap, Bitconnect is offering members outside the USA the ability to convert them to their new coin, BitconnectX, currently in ICO, at a valuation of 1 BCC to $150.
This is likely what USI-Tech will also use as their exit strategy. Currently, for USA members, USI-Tech is holding all withdrawal requests while they "perform audits" of some sort, claiming fraud by some of their promoters. The interest-calculating algorithms continue to run, and members have been left with the impression that although no new buy-ins will be permitted, payouts and withdrawals will continue in the next few days for all packages already purchased.
That's very unlikely. It's very doubtful they have the funds to pay, for the same reasons Bitconnect didn't, even with non-USA members still able to buy in. No real numbers have been published, but anecdotal figures say the US was at least half of USI-Tech's market. USI-Tech can't afford to pay out interest to US members unless they also allow new US members to join, which they have already stated won't happen.
But USI-Tech also has an ICO in the works, the Tech Token. Over 250,000,000 tokens have already been purchased by USI-Tech members, but sales have slowed to a crawl since USI-Tech's shutdown for US members was announced.
So, since USI-Tech doesn't have the funds to reimburse the now-blocked US members in dollars or bitcoin, they'll instead give them Tech Tokens. The 200,000,000 or so tokens still available for sale will be divided up between the US members proportionally based on the amount each had expected to still receive on their "investment" in BTC packages.
This is a win-win for USI-Tech because they can claim they provided some form of reimbursement to the US members while also pumping their own coin. But US members are left with a token they won't have a way to use and may not even have a place to sell.