Bitconnect Shuts Down, Accused of Running a Ponzi Scheme

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Controversial Cryptocurrency Bitconnect announces the closure of its exchange platform.

Bitconnect shuts down

Bitconnect informed its members that it was closing the company’s lending and exchange platforms. It closed the lending platform immediately and all balances were converted to BCC (Bitconnect Coins).

Users were not able to convert their BCC to BTC because of the exchange’s closure. Some users reported not being able to withdraw their BCC in hopes of selling it on external cryptocurrency exchanges.

History

Bitconnect was first announced on Bitcoin.org and it dubbed itself as a self-regulated financial system. It started gaining all-time highs by March 2017 and was briefly one of the top 10 coins by December 2017. However, there were many skeptics and we even found this article which was posted 9 months ago.

Bitconnect’s Woes

In Texas and North Carolina

Bitconnect received at least Cease and Desist letters in Texas and North Carolina. The company said those two, along with constant bad press contributed to the growing lack of confidence in the platform.

In the Bitconnect platform, you deposit money which in turn gets converted to Bitconnect Coins. That money is locked for a certain number of days and is supposed to earn interest per day. It is promising at most 1% daily interest. Basically, the more money you invested, the higher the returns, it claimed.

Comments from Vitalik Buterin and Charlie Lee

Bitconnect has been suspected by several prominent members of the cryptocurrency as a big-time Ponzi scheme or scam. Ethereum founder Vitalik Buterin found the 1% daily return to being suspicious. In a tweet,  Buterin noted that it seems the 1% return is the major benefit of joining Bitconnect, while the other coins such as Bitcoin and Ether have around 700k transactions daily with up to 4M daily transaction fees.

Litecoin founder Charlie Lee also things the same. In a post on Twitter, he mentioned: “I’ve been asked what I think about BitConnect. From the surface, seems like a classic Ponzi scheme. I wouldn’t invest in it and wouldn’t recommend anyone else to.”

UK

Apart from the orders in the States, Bitconnect also had woes in the United Kingdom, when the UK Registrar of Companies threatened to shut it down until it can prove beyond reasonable doubt that it is not running a Ponzi.

Bitconnect Philippines

Bitconnect has a presence in the Philippines, with various “chapters” or groups in several cities and provinces. There’s even an upcoming Bitconnect Conference in Davao on January 26, 2018. We are not able to confirm if this is still ongoing, although we are certain that it won’t be.

Bitconnect Value

Earlier today, Bitconnect’s value went down from $209 to $37 in the span of 3 hours. This means that anyone trying to convert their BCC today is 100% likely to lose a lot from their original investment.

Where to Convert Bitconnect to Bitcoin

With the main exchange platform closed, one platform that still trades BCC to BTC is Coinexchange.io. You can get to its website here: https://www.coinexchange.io/market/BCC/BTC. Disclaimer, the Bitconnect Website, and possibly its entire infrastructure are at heavy load and scrutiny right now. We’ve seen reports on Twitter and Reddit where their Bitconnect coins do not get transferred to the exchanges that still accept them. Please do this at your own risk, or verify with other users who are able to successfully convert their coins.

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[…] Read More: Bitconnect Shuts Down, Accused of Running a Ponzi Scheme […]

[…] Read more: Bitconnect Shuts Down, Accused of Running a Ponzi Scheme […]

[…] It is important to note that as the price of bitcoin went down, so does the value of other cryptocurrencies. Other reasons that get attributed to cryptocurrencies’ decline are the looming regulations in South Korea and China with regards to virtual currencies, as well as the exit of controversial digital currency – Bitconnect. […]

[…] January 17, 2018, news broke that the controversial platform Bitconnect has closed its doors. Before doing so, it refunded its users with BCC (Bitconnect Coins) with the value equivalent to […]

Michael Mislos

A business ad graduate from the Pamantasan ng Lungsod ng Maynila, Mike is the website manager of Bitpinas.com. He is responsible for almost every content you see on the site, from topic/news selection to editing of articles. Mike believes correct information about blockchain and cryptocurrency can empower people to make accurate decisions about the industry, which, in turn, should deter bad actors from taking advantage of crypto & blockchain. [Telegram @mikemislos]

Michael Mislos
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