The "BitConnect X" ICO team (yes, there is still a BitConnect team) claims that it will somehow value the BitConnect Coin (BCC) at $150 during its upcoming crowdsale, even though the actual price is about currently hovering around $3. The plan is to convert BCC to BitConnect X ICO tokens as soon as they can get enough new "investors" onboard. The team promises that the BCC will regain all of its lost value in the new money grab by a company notorious for scamming users globally.
BitConnect abruptly shut down its cryptocurrency exchange in mid-January, citing a litany of excuses including bad press, government cease and desist letters, and denial of service attacks by hackers. Customers no longer had access to their money when the exchange was frozen. Its own BCC coin market cap dropped from $2+ billion down to around $20 million as of March 1.
BitConnect Youtubers, who were largely responsible for promoting the BitConnect house of cards, quickly deleted their videos as news spread of a court order freeze on BitConnect's assets. The freeze came after the filing of numerous lawsuits against BitConnect where plaintiffs stood to lose any chance of recovering their funds if BitConnect's assets were not frozen. The BCC was trading at more than $300 just before the company announced it was shutting down operations and dropped to $6 a day after the announcement.
A pyramid scheme and a Ponzi scheme
- Pyramid scheme investors, like those who invested in BitConnect, are paid bonuses for bringing in new investors at lower levels.
- Ponzi scheme investors, again like those who invested in BitConnect, are led to believe they are investing in something of value when, in fact, their money is going to payback previous investments plus gains on those investments.
New BitConnect members would buy BitConnect Coins which they could then lend at a 40% interest rate per month to other members. They could lend BCC at an even higher interest rate if they recruited others to buy BCC.
On Feb 20, 2018 the U.S. Securities and Exchange Commission (SEC) denied a Freedom of Information Request on the BitConnect cryptocurrency scheme, citing an exemption usually applied to records tied to law enforcement. The public will have to wait to get details on how BitConnect's gigantic scam operation worked (and is still working) from the inside, though the individuals involved are claimed by several plaintiffs to be the founders of OneCoin, the first large-scale digital currency Ponzi scheme.
By: BGN Editorial Staff