[2018-01-19] Bitconnect Ponzi Scheme - No Sympathy From Crypto Community

[cybersofts]

Bitconnect Ponzi Scheme - No Sympathy From Crypto Community



What looked too good to be true ended up being just that, as Bitconnect has all but closed its doors.

Long accused of being a Ponzi-scheme, Bitconnect shut down its cryptocurrency exchange and lending service this week. As stated on their website, Bitconnect had received cease and desist letters from two American securities regulators - leading to the closure of their lending and exchange platforms. Still, Bitconnect will continue to run its website and wallet service.


Sketchy ‘Ponzi’ offerings

Since its inception in January 2017, many were skeptical about Bitconnect services. In essence, one needed to send Bitconnect Bitcoin in exchange for Bitconnect Coin (BCC) on their exchange.

Once you had BCC, you were guaranteed “up to 120 percent return per year.” Users were told they were earning interest by holding their coin “for helping maintain the security of the network.”

 

Source: Bitconnect.co


Lending platform

Bitconnect’s lending platform is what really led to accusations of a Ponzi scheme, as well as cease and desist orders from regulators.

 

Source: Bitconnect.co

As the above illustration explains, users bought BCC with Bitcoin and then lent out their BCC on the Bitconnect lending software.

Users would receive varying percentages of interest depending on the amount of BCC they had lent.

 

Source: Bitconnect.co

Add in the referral system seen in many other Ponzi schemes and the fact that the operation was run anonymously; it's hardly surprising that this whole endeavor has ended in tears.

The lending scheme was the main draw card of Bitconnect because of its huge promise of returns. In order to participate in the scheme, you had to buy BCC - which saw the token hit an all-time high of $437.31 per BCC before it plummeted in value following the closure this week.

That being said, the cryptocurrency is still alive and trading at around $35 at the time of writing.




Social media burns Bitconnect

Following Bitconnect’s closure, social media was abuzz with sentiments of ‘I told you so.’

TenX co-founder Julian Hosp highlighted the fact that BCC was still trading as a real head-scratcher.

    Everything that's wrong with crypto in one picture! #bitconnect #scam #ponzi #cryptocurrencies #bubble pic.twitter.com/t5o9Nm1rZ4
    — Dr. Julian Hosp (@julianhosp) January 18, 2018

Francis Pouliot shared a hilarious video of a Bitconnect meet which had been slightly dubbed over.

    People invested billions of dollars in this

    (This video is actually hilarious recommended for memephiles) https://t.co/Jpb8xpJsx7
    — Francis Pouliot (@francispouliot_) January 17, 2018

American cartoonist Spike Trotman shared one of the most entertaining and eerily accurate predictions back in September 2017, postulating that Bitconnect was indeed a Ponzi scheme.

Her latest tweet is a screenshot of the Bitconnect Reddit page, with subreddits for a suicide hotline as well as a massive legal action megathread. Do yourself a favor and take a look at Iron Spike’s full threat on Bitconnect - it’s brilliant.

    The current state of the Bitconnect subreddit is truly a thing to behold. https://t.co/QoGgUiE0XM
    — Iron Spike (@Iron_Spike) January 19, 2018

Rodolfo Novak shared a photo of the monumental collapse in price of Bitconnect from Coinmarketcap, highlight the moment the Ponzi scheme hits ‘exit time.’

    This is what a real ponzi looks like at the scam exit time. #BitConnect #BCC pic.twitter.com/2oAlaDMJtZ
    — Rodolfo Novak (@nvk) January 17, 2018


Source: https://cointelegraph.com/news/bitconnect-ponzi-scheme-no-sympathy-from-crypto-community

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[odolvlobo]

Update:
...You can exchange your BCC tokens at the current rate of $142.47 USD per token.
Only until March 19, 2018.
From that day, the currency will no longer have any value and will stop circulating.
Follow the instructions in the following article:
http://...
...

This is a scam of course. Don't send them your BCC. They will simply take the BCC and sell it for $10 each and give you nothing.

[bigNoizboo]

I'm in one with the whole crypto community in not giving any shred of sympathy to the demise of Bitconnect. The authorities should have moved in earlier to minimize the spread of Bitconnect's schemes. I hope that we'll be seeing the implementation of a more rigorous system of scrutinizing the business applications of these type of exchanges in the near future as these garbages are one of the reasons why people are skeptical of things that relates to the crypto community.

But it's actually very sad to know that in this day and age where information is very easily spread through the internet, there are still people who fall for these type of schemes. A little digging could have helped and joining forums like bitcointalk could have educated those people curious enough to pay attention to whatever lies bitconnect is saying. And therein lies the challenge to the entire crypto community. Maybe there's something more that we can do to stop the spread of crypto related schemes before they can claim their first victim.