BitConnect -- A Classic CryptoScam

BitConnect -- A Classic CryptoScam

By bettercallpaul | Better Call Paul | 30 Apr 2020


[Jacksonville, FL | 04/30/2020] 

Hello everyone, in this article, I will be covering one of the most famous crypto scams out there, and to this date, probably one of the most successful in terms of what they were able to steal from their customers.  Of course, the scam I refer to is none other than.....BitConnect.  

So, BitConnect was a platform with its own coin (BCC).  The company allowed users to deposit funds and convert them to BCC, which could then be lended through their network for a pretty decent return.  

I have to admit that I fell victim to this scam personally, but the good thing was, I only lost money that I had previously gained from trading, so the loss didn't impact me that much -- I just hated to see it crash and burn.  

The BitConnect coin was also highly ranked and consistently held a high value, consistently being well above $500.00 on the exchanges.  It seemed like a project that was going to make it big.  

The problem was that the project had no way of sustaining itself, and the developers knew this -- leading to a situation that resembled classic Ponzi schemes to where those who entered late in the game lost their entire investments. 

State bureaucrats in Texas started to see red flags around the project, and issued a letter telling the company to cease all operations in Texas.  When this was made public, confidence in the project dropped.  The lending platform was suspended for users, and the developers made an announcement that they would be refunding all money to all users, but they would be doing so with the BCC coin, which was rapidly losing value.  

For instance, when they paid me out, my BCC went from being worth about $500 to just under $40 within a 45 minute period.  

Then, they disappeared into the night.

...and that was that.  BitConnect shut down and kept all of our money.  

So what can we learn here to prevent us "gullible investors" from investing in another scam project?  

First of all, all of us who invested in BCC were not "gullible."  The scam was very well created and everything about it seemed legit.  The BCC asset was holding its value, so BitConnect seemed a great place to invest.  However, because it was new, I decided I would only invest gains from other investments, that way if I lost it all, I wouldn't actually be losing anything.  Unfortunately, there were some folks who lost their entire cryptocurrency holdings to BitConnect. 

Steps to Prevent Being a Victim

  1. Never invest more than you are able and willing to lose.  This is the most important concept when it comes to investing in blockchain products.  If you use what you gained from other investments, then you never go against your own bottom line, and if you gain on top of that, you now have two layers of protection against your bottom line. 

  1. Do your Due Diligence.  Always research the platform you are about to invest in.  Look at market performance and value of the asset, of course; but you also need to investigate the project itself, not just its performance on the markets.  Are the developers active?  When was the last update to the project?  Does the project have a roadmap?  Are the developers meeting the goals on the roadmap?  Are there are posts or articles written about the project, etc.   

These are the questions that you should seek answers to before you invest.  

  1. Never listen to anyone promoting a project in a chat box.  On the exchanges, you will consistently see people who are attempting to manipulate that markets.  They will start saying things like "Buy BCC!  It's going to the moon."  These people are the reason that "pump and dump" exists.  Avoid these people and the projects they promote like the plague.  

  2. Start small.  This goes along with the first tip of only investing what you can afford to lose, but it is a bit different.  When investing in a new project, start small, play the market, and see if you are able to generate a profit, and then use that profit to try to generate more of a profit.  

If you follow these tips, you should be able to steer clear of these types of scams.  

BitConnect is considered by many to be one of the largest scams in the cryptosphere today because of the methods with which they were able to maintain the market value of their coin -- so those who got in early and sold when the value was up actually made money, while those who got in late quite frankly had the potential to lost everything, and many did.  

In the end, it appears they finally arrested some of the scammers behind BitConnect -- at least the man behind their Asian operations. Divyesh Darji was arrested in 2018, according to this article on Toshitime.

I know many of you have been well aware of this Ponzi for quite some time, but there are many out there that are brand new to crypto that need to be able to recognize these scams, and the only way to do that is to educate them as to what that should look for.

References/Source Material:

  1. https://toshitimes.com/bitconnect/ - Divyesh Darji Finally Arrested

(NOTE FROM AUTHOR:  In order to reach as many people as possible, I attempted to re-publish this article on another platform.  That platform's automated syndication checker flagged my article due to this article having been published first.  I am including this note at the end of the article as irrefutable proof that I am the same person trying to publish my article, which I own and hold copyright protection over, on two different platforms.)   

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bettercallpaul
bettercallpaul

Winner of the Publish0x 100K writing contest, I am a seasoned freelance creative writer with over a decade of writing and journalism experience. I love to write, cook, and learn new things. I look forward to contributing relevant content.


Better Call Paul
Better Call Paul

A multi-topic blog focusing on legal and technology topics. All published content is intellectual property and copyright protected under federal laws. Copyright is held by the author, W. Paul Alexander.

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