BitConnect is now officially CLOSED. It is both a good and a bad day, that should be remembered forever, as it is a great educational example of what to avoid in the future.
BitConnect was one of the most obvious ponzi schemes there’ve been around in the cryptocurrency market. The platform offered “lending opportunities to enter the Bitcoin market”, where you earned interest on lending the BCC cryptocurrency, while the “interest” had no source and was rather printed out of thin air.
This information should be digested with clear mind. Many people will now use this case to debilitate cryptocurrency as a whole, linking this case to the word “cryptocurrency” and spreading FUD – just wait for the mainstream media to catch up.
If Madoff performed the largest ponzi fraud in U.S. history, BitConnect has done that with crypto, leaving tens of thousands of people without their initial investment. Back in 2008, when Madoff was arrested, many people have lost trust towards banking in general, and it took time to rebound, as it was also the year of Credit Crunch.
Scam exit was smartish, kind of – they made it in a traditional “we got hacked” way. On their official website, BitConnect mentioned, that they are closing down due to receiving a lot of “continuous bad press” lately, which apparently made it impossible to run a stable platform, followed by 2 Cease and Desist letters from Texas and Californian authorities. Finally, their platform was allegedly under constant DDoS attacks, which obviously isn’t true.
Worst thing of all – BitConnect founders are anonymous and have used paid signatories in UK and USA to register their companies. Although it should be easy to track the founders, people will never be able to return their funds, as the token has dropped by 90% in price. I wonder who are these people, who buy them on exchanges…
This case will probably be used by authorities to tackle anonymity in cryptocurrencies and to burden more regulations in the industry. Regulations are great, only as long as safety provided is at least on par with your freedom & rights taken.
Long story short – invest with your brain, not emotions and greed. And if things look too good to be true, make sure to consider it as a bad signal.