Hello everyone and hope you enjoyed the last article on 'My Greatest Crypto scams of all Times'. If you didn't read the last one however (my number 4 entry), kindly do so here and give it a quick read to know who came before Bitconnect. Without much ado, let's get right into it and understand what Bitconnect is and how they scammed unsuspecting investors.
When you talk about Crypto scams, you just have to give mention to their granddaddy, BitConnect. Now BitConnect was not like your regular ICO scam, or a pump and dump scam (but many had accused them of being a Ponzi scheme). BitConnect was a platform that was launched in January of 2017, and it had its own coin BitConnect Coin (BCC). The company allowed for users to deposit funds and convert them to BCC, promising high returns on your investment. Users could also choose to lend out their BCC to other users and could get interests which were a nice passive income through their network. Then there was also the classic referral system where you earned as you referred.
One of the reason why many fell for the BitConnect scam was because the coin was a highly ranked one and it consistently held a high value, most times being well above $500.00 on the exchanges. So while it seemed like a project that was going to make it big, there was one very worrying detail. While the coin was listed on 7 exchanges, their own exchange had 90+% of the volume and their exchange also had the highest price by wide margin. It sure smelt like someone was manipulating things to pump the price, creating imaginary capital gains and luring more victims to the slaughter slab.
State bureaucrats in Texas were the first to start seeing warning signs and they started seeing red flags around the project, and issued a letter warning the company to cease and desist from all operations in Texas. When this was made public, users confidence in the project started to drop. The first cracks in the wall started to show and the lending platform was suspended for users. The BCC developers then announced that they would be refunding their money to all the users, but rather than refund it in USD or BTC or in the currency they deposited it, they would be doing so with the BCC coin, which was at the time rapidly losing its value. And then ladies and gentlemen, out of the blues (well we honestly can't say out of the blues, we saw the signs,) and then we woke up one day and this happened:
"In a menacing turn of events yesterday, Bitcoin investment lending platform BitConnect abruptly announced it is shutting down its lending and exchange services. But while this sudden “curveball” might have come as a massive surprise for thousands of gullible investors, the writing was on the wall all along".
...and that was how it ended guys. BitConnect shut downwithout any prior warning or notice and they kept all of their users money. Many people saw BitConnect as a very viable investment option and they put their entire Cryptocurrency holdings into it and sadly they lost it all.
Like I have said countless times, and will continue to say countless more times, always carry out your Due diligence before investing in anything. Thorough research into the project would have shown you some warning signs that might have prevented you from diving headlong and losing it all. Check for the technology and the problem it seeks to solve in the society. Look out for the market performance and the value of the asset. Check if the developers are active and is their social media handles and platforms active or are they a graveyard? When was the last time an update was made to the project? Does the project have a roadmap for its development? Are the developers following or trying to meet the goals on the roadmap for the project?
Pls and pls, never listen to those people who aggressively promote a project in a chat box. If you are an active user of Telegram or Reddit, you will find them in a lot of chat rooms and groups. You will consistently see those people who are try to to manipulate you and the markets. They are the ones you will see saying stuffs like "Buy BCC! or "BCC to the moon!" or "BCC to boom hard". These people try to manipulate you to buy and when you do, they carry out the pump and dump and turn your funds into a bag of trash. Avoid these people and those god forsaken projects they promote like they are the plague to safeguard yourself from loss and later tears, pls be safe.
I will say this again, I am not writing this series to make fun of those who lost money in these scams. I am writing it for us to learn what not to do and what to stay away from to avoid a repeat. Hope you have learnt a thing or two so far. See you on the next episode, and let's see who number two will be on the greatest scams in Crypto history. Bye for now guys