BitConnect

BitConnect

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Updated Jun 21, 2018 at 05:24AM EDT by Y F.

Added Jan 18, 2018 at 01:40PM EST by Matt.

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About

BitConnect is a cryptocurrency and exchange platform that has been accused of being a Ponzi scheme based on how it allows users to "loan" cryptocurrency and rewards users for finding people who want loans from BitConnect. In 2018, the platform closed amid "continuous bad press," which included cease-and-desist letters and DDoS attacks.

History

On November 13th, 2016, BitConnect announced that they would be launching in a press release on their website.[1] in the announcement, the company described itself as "on the cutting edge of Bitcoin currency and trading. Due to the growing demand for independent banking, Bitconnect is an exemplary format for today’s smart investor. Bitconnect an open source community driven decentralized cryptocurrency will be launching soon."

The following month, on December 26th, the company launched its lending platfrom and digital wallet.[2]

Features

According to their website, BitConnect "is an open source all in one bitcoin and crypto community platform designed to provide multiple investment opportunities with cryptocurrency education where it is entirely possible to find the independence we all desire, in a community of like-minded, freedom loving individuals who, like you, are seeking the possibility of income stability in a very unstable world."[3]



The platform is community-driven currency and platform. Only 28 million BitConnect Coins will exist, as people mine for more, the value of a single coin increases. Additionally, the more people who buy BitConnect Coin using other currencies, the value increases. Users also have the ability to trade BitConnect Coin.

The BitConnect wallet allows users to accrue interest on their BitConnect Coins, meaning their total number will increase based on how long they hold their BitConnect Coin. Users also have the opportunity to lend Coins to each other, and if users sign others up for lending opportunities through BitConnect, the company rewards them with bonuses.

Highlights

Controversy

Since its inception, BitConnect has been accused of engaging in nefarious activity akin to a Ponzi Scheme. New York[4] magazine wrote of the company:

"BitConnect has always stood out as particularly sketchy. Run anonymously, the cryptocurrency lending and exchange platform has been accused for nearly a year of being little more than a Ponzi scheme, thanks in part to its multilevel marketing structure. BitConnect would both “loan” you a certain amount of its own cryptocurrency, known as BCC, as well as give you a bonus if you could find more people who also wanted loans from BitConnect. In other words, the more people you got to sign up for BitConnect, the more BCC you got. Think of it like HerbaLife, but for cryptocurrency."

Additionally, TechCrunch[6] described the process of using the lending system as similar to a Ponzi scheme. They wrote, "Bitconnect was an anonymously-run site where users could loan their cryptocurrency to the company in exchange for outsized returns depending on how long the loan was for. For example, a $10,000 loan for 180 days would purportedly give you ~40% returns each month, with a .20% daily bonus."

On January 16th, 2018, the company announed a half of lending and exchange platform. The ending of lending and exchange also meant the closing of the feature. In a press release, they announced that this was due to "continuous bad press." They wrote:[5]

"The reason for halt of lending and exchange platform has many reasons as follow:

- The continuous bad press has made community members uneasy and created a lack of confidence in the platform.
- We have received two Cease and Desist letters, one from the Texas State Securities Board, and one from the North Carolina Secretary of State Securities Division. These actions have become a hindrance for the legal continuation of the platform.
- Outside forces have performed DDos attacks on platform several times and have made it clear that these will continue. These interruptions in service have made the platform unstable and have created more panic inside the community."

Despite the closing of the lending and exchange platform, the company still intends to support BitConnect Coin.

BitConnect Carlos

BitConnect Carlos is a nickname given to Carlos Matos, an investor in Bitconnect who showed up to the company's First Annual Ceremony in Thailand. During the performance, his jubilant and enthusiastic stage presence, alongside his most notable line, an elongated phrasing of "Bitconnect", has been the subject of mockery and remixes (example shown below, left), first being popularized by Youtuber h3h3productions. (video shown below, right)



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Top Comment

Timey16
Timey16

Yet again, the Bitcoin greed leaving behind common sense in search for quick and easy money!

"This is good for Bitcoin"
"It's not a bubble!" (Even though every single time in history a commodity had such an extreme increase in value it has always been a bubble. Every. Single. Time.)

I feel sorry for none of the people losing their live's savings over Bitconnect, only their families that now have to suffer under their idiocy.

There's a reason veteran.. but no wait, amateur bitcoin miners/investors with zero experience in stock markets know better because "they have experience with bitcoin".

  1. rule of stock trading: never invest more money than you're willing and able to lose.
+20

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