Bitconnect celebrates its two-year birthday since it burned as a pyramid scheme and got the title as the most controversial and notorious platform as we reported back in our blockchain news.
The crypto lending scheme got very popular between the users and was known for its mass-audience meetings and messages that promised huge rates of return depending on the bitcoin prices. BitConnect’s token BCC reached prices close to $600 too. However, in only one day, BCC dropped to below a dollar and was soon delisted from all of the exchanges after the platform announced it was closing because of the multiple cease and desist orders. BitConnect was the first crypto lending scheme that took in Bitcoin and paid out huge interest rates in dollars.
The trick was that the customers had to convert their Bitcoin coins to BCC coins on the website. Because the BitConnect token was only traded on the internal BitConenct exchange, the scheme could set the price as high as the platform wanted. BCC started off really slowly with a price of just $3.0 but later the customers had to pay a much higher price. The approach is exactly the one of a Ponzi scheme or a financial pyramid that strictly relies on new investors paying in to pay the earliest investors. Bitconnect however, managed to pay out a monthly return for most of the scheme’s duration which helped to create the illusion of the stable system.
BitConnect worked very cautionary but that didn’t help other similar projects from cropping up. Short after Bitconect crashed, DavorCoin which is another similar project, lost about 99 percent of its value. Similar attempts also included Auscoin and when Bitconnect failed officially, other big crypto scams unraveled including Onecoin. Sadly, this did not kill the attempts of the people to build Ponzi schemes. In 2019, the Plustoken project became known after a lot of months of attracting Asian investors without communicating with Western Buyers. Plustoken raised a lot of BTC haul and is still working its way up to exchanges today.
BitConnect celebrates the birthday of its crash and it’s important to remember that the platform even tried to relaunch a new iteration by selling new tokens however the name already was out there. Trevon James, one of the main influencers that promoted the scheme, is still at large but active on social media. He was criticized for moving into HEX which is another suspected crypto scheme.
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]