Bitconnect

BitConnect Coin
BitConnect logo
Ticker symbol BCC
Development
Initial release 15 February 2016[1]
Development status Permanently Closed; reported as a scam or a Ponzi scheme
Written in C++
Operating system Windows, OS X, Linux, Android
Source model Open source
License MIT License
Website https://bitconnect.co/
Ledger
Timestamping scheme Scrypt (PoW) + Proof of Stake
Block explorer chainz.cryptoid.info

BitConnect (BCC) was an open-source cryptocurrency which has been described as a high-yield investment program and as a Ponzi scheme.[2][3]

Bitconnect closed in January 2018. The BCC token was still in circulation, and crashed in price. As of September 2018, the token has been delisted from the last exchange that traded it, Trade Satoshi.[4]

The alleged founder of BitConnect, Divyesh Darji, was arrested in Dubai in August 2018.[4]

Criticism and collapse

Bitconnect was suspected of being a Ponzi scheme[5] because of its multilevel marketing structure and impossibly high payouts (1% daily compounded interest).[6][7][8] The BitConnect Coin was among the world’s top 20 most successful cryptocurrency tokens[9] until its price plunged 65 percent starting on January 3, 2018. After BCC hit an all-time high of US $463 in December 2017, it declined to US $5.92 as of January 30, 2018. Bitconnect has said it will refund all outstanding loans at a rate of US $363.62 to the BitConnect Wallet in form of BCC. However, at the time BitConnect paid outstanding loans, the currency's market price had already declined to less than $10, making the payments largely worthless.[7][10][11]

On January 16, 2018, BitConnect announced it would shut down its cryptocurrency exchange and lending operation after regulators from Texas and North Carolina issued a cease and desist order against it.[12][13][14][15] On January 31, 2018, the U.S. District Court, Western District of Kentucky, granted a temporary restraining order freezing BitConnect's assets and "to disclose cryptocurrency wallet and trading account addresses, as well as the identities of anyone to whom BitConnect has sent digital currencies within the last 90 days."[16]

History

BitConnect was released in 2016 with the goal of allowing users to lend Bitcoin for interest. Though this goal was never realized, BCC acted as an alt-coin but allowed users to earn interest on their own wallet. [1]

November 7, 2017, BitConnect was issued a notice with 2 months to prove its legitimacy. [1]

On January 3, 2018, Texas State Securities Board issued a cease and desist to the company, calling it a Ponzi scheme, and citing failings in user earnings transparency, and misleading statements. [1] Texas State Security Board and North Carolina Secretary of State Securities Division warned that BitConnect was not registered to sell securities in their respective states.[1]

January 17, 2018, BitConnect shut down,[3][1] and BCC prices crashed by 92% immediately after.[6] BitConnect announced it would refund its loans. [7] However, the BitConnect X website remained open and operational, having just begun its ICO and allowing users to purchase BCCX coins with their BCC coins. [17]

On January 31, 2018, a temporary restraining order froze BitConnect's assets, expiring on February 13th.[16]

In August 2018, Divyesh Darji, the alleged founder and core promoter of BitConnect, was arrested in Dubai.[4]


See also

References

  1. 1 2 3 4 5 6 "What is BitConnect (BCC) and how does it work?". Finder.com. 2 January 2018. Archived from the original on 25 January 2018. Retrieved 30 January 2018.
  2. ↑ Mix (2018-01-17). "How BitConnect pulled the biggest exit scheme in cryptocurrency". The Next Web. Archived from the original on 2018-01-31. Retrieved 2018-01-30.
  3. 1 2 Wieczner, Jen (January 17, 2018). "Bitcoin Crashes to Below $10,000 as Cryptocurrency Scams Scare Investors". Fortune. Archived from the original on January 27, 2018. Retrieved February 10, 2018.
  4. 1 2 3 https://www.zdnet.com/article/alleged-bitconnect-head-arrested-in-dubai/
  5. ↑ Popper, Nathaniel; Bowles, Nellie (2018). "Bitcoin Falls Below $10,000 as Virtual Currency Bubble Deflates". The New York Times. ISSN 0362-4331. Archived from the original on 2018-01-18. Retrieved 2018-01-18.
  6. 1 2 Williams, Sean. "BitConnect, Alleged Crypto Ponzi Scheme, Shutters Its Lending and Exchange Services and Plunges 92%". The Motley Fool. Archived from the original on 2018-01-18. Retrieved 2018-01-18.
  7. 1 2 3 Tepper, Fitz. "Bitconnect, which has been accused of running a Ponzi scheme, shuts down". TechCrunch. Archived from the original on 2018-01-18. Retrieved 2018-01-18.
  8. ↑ Cheng, Evelyn (2018-01-17). "Digital currency plunge may be healthy for cryptocurrency market". CNBC. Archived from the original on 2018-01-18. Retrieved 2018-01-18.
  9. ↑ Williams, Sean (2017-07-20). "The 20 Largest Cryptocurrencies by Market Cap". The Motley Fool. Retrieved 2018-06-22.
  10. ↑ "Changes coming for the Bitconnect system - Halt of lending and exchange platform". BitConnect. 2018-01-16. Archived from the original on 2018-01-18.
  11. ↑ Bhargav, Sushant (2018-01-16). "Bitconnect Shut Down it's Lending Platform Officially for Good". TechScoop.in. Archived from the original on 2018-01-18. Retrieved 2018-01-18.
  12. ↑ McKay, Tom (2018-01-17). "BitConnect, Anonymously-Run Crypto Exchange, Crashes After States Issue Cease and Desists". Gizmodo. Archived from the original on 2018-01-17. Retrieved 2018-01-17.
  13. ↑ Kharif, Olga (2018-01-16). "BitConnect Closes Exchange as States Warn of Unregulated Sales". Bloomberg. Archived from the original on 2018-01-17. Retrieved 2018-01-17.
  14. ↑ Swearingen, Jake (2018-01-17). "The Rise and Fall of BitConnect, the Sketchiest Crypto Exchange". Select All. New York Magazine. Archived from the original on 2018-01-17. Retrieved 2018-01-17.
  15. ↑ "Crypto News Update". NASDAQ.com. 2018-01-17. Archived from the original on 2018-01-17. Retrieved 2018-01-18.
  16. 1 2 De, Nikhilesh (2018-01-31). "US Court Freezes BitConnect Assets as Lawsuits Mount". CoinDesk. Archived from the original on 9 February 2018. Retrieved 8 February 2018.
  17. ↑ Sedgwick, Kai (20 Jan 2018). "Not Content Scamming $1.5 Billion, Bitconnect Wants Another $500 Million for ICO". Bitcoin. Retrieved 9 October 2018.
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