In this new series, we’ll be talking about some of the Crypto world’s biggest scams! With the boom of digital currencies, you can expect to see a lot of scammers trying to take advantage of the hype. With all the scamming going on, we not only want to teach you about these scams but we also want to teach you how to identify and avoid other possible cryptocurrency scams out there.
Today, we discuss a very controversial topic: BitConnect.
Like many legitimate cryptocurrencies, BitConnect Coin or BCC is an open source, P2P decentralized digital currency. It is marketed more as an investment than an actual currency. And unlike other cryptocurrencies, BCC offers coin holders an interest on their balances!
BCC initially targeted Bitcoin (BTC) holders. To be a part of the BCC community, people have their BTC deposited and converted to BCC.
According to the BitConnect website, this is what you can do with BCC:
Notice the phrase “daily profit” in the above graphic. BCC offers its coin holders a whopping 1% average daily interest income guaranteed! If it’s too good to be true, it probably isn’t.
The following chart shows just how much you can earn when you lend your BCC:
Ethereum (ETC) founder Vitalik Buterin is one of the many big names in the crypto-community that was very active in voicing out his opinion on BCC. He compared BCC with BTC and ETH in his tweet below:
There isn’t really much you can do with BCC outside or even inside the community. BTC can be used to purchase goods and services, ETH can be used to fund the creation of DAPPS. With BCC, all you can do with them is lend and trade.
Now this may not be a tell-tale sign of a scam but it speaks volumes about its worth and value as more use out of the coin would make it more valuable.
How the BCC system works is a huge red flag in itself. They had a referral feature that is akin to that used by Multi-Level Marketing or (MLM) companies. In short, a pyramid/Ponzi scheme where older investors are paid with the money invested in by the newer ones.
Why it Worked
So why did this extravagant and painfully obvious scam still manage to gain the trust and investments of so many people? It all comes down to advertising. BCC promised its users so much more than what they could keep.
Security & Legitimacy
Everything about how BCC connects to its users screams legitimate. Its website is not just some simple, shady website made by the founder’s web-design student cousin. Its content is not written by some remote ghostwriter with broken English paid $0.50 an article. It really seems like a legitimate business website.
The incredibly high gains are blinding. The promise of getting your ROI and then some in a short span of time is enough to coax almost everybody into investing. 40%/month? Plus a 0.20% bonus? It’s easy money!
Easy Road to Financial Freedom
Everybody wants financial freedom and most likely, when given the choice, would take the easy route towards that goal. BCC marketed that they provided that route. All you had to do was acquire BitConnect coin and you’d have made your way to financial freedom.
They were downright taking advantage of people’s desire to be financially independent—rid of all financial worries and stress.
Where is BitConnect Now?
Last month, BitConnect announced that their lending feature was shutting down.
This was following two cease and desist orders from regulators from Texas and North Carolina. Many bad press has also affected BCC operations as people caught on with their Ponzi scheme.
A temporary restraining order has also been granted to freeze BCC assets following a lawsuit filed against the company. BCC promoters even faced trials.
The once $400 worth BCC is now valued at $2.5538. However, BCC holders are told to hold on to their coins and expect an increase in value later this year.
What do you think of BitConnect? Do you disagree with it being a scam? What other scams do you think we should cover? Comment your thoughts and opinions below!
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