One of the most unfortunate companions of innovation involves cryptos and fraud. Bit connect may serve as one of numerous instances showing that cryptocurrency is a highly risky and sophisticated investment.

In 2016, they launched a platform known as BitConnect where depositors were promised an unbelievable interest rate on deposits in an allegedly lending program. Users would trade in their bitcoins plus get the promise of daily interests and huge profits with this approach. It claimed it had a cryptocurrency based trading bot earning from price volatility.

Nevertheless, in January of 2018, BitConnect shut down its loan contract platform plus trading system causing investors bewilderment and loss of cash. A fall in the value of the native BTC token led to the collapse of the entire system. Investigations revealed that this was happening in ponzischeme, where newly invested monies were used for pay off to initial investors and to create artificial hype around their tokens.

BitConnect clearly portrayed the lack of regulated markets leading to the vulnerability of the investor’s to fraud. Several countries and regulatory authorities in the financial sector warned on the risks involved with such schemes saying one requires to be careful not to fall in a trap.

This means that since cryptocurrencies are generally not traceable, it is possible for scammers to take advantage of this. Excessive talk about high returns by investors should be treated with caution and investors have to conduct their research well before giving money out. These regulatory authorities do not sleep but continue striving to find appropriate mechanisms that will preserve the integrity of the thriving crypto industry as well as protect all those innocent investors who rely on the integrity of such markets. As the crypto sphere matures, these lessons will be important in building a safer and transparent investment space for crypto.