BitConnect Is Preying on New Investors - KDTV6 CYPTO NEWS

Wednesday, December 20, 2017

BitConnect Is Preying on New Investors

Since BitConnect (BCC) rose to the top echelons of CoinMarketCap’s chart several months ago, it has received much skepticism from the mainstream cryptocurrency community. Despite this, it has maintained a huge market cap, seldom dipping below the top 20 coins, and seems to be continually growing.
It’s clear that BitConnect, which promises daily returns of around 1% for users who “loan” money by locking it up in BitConnect’s systems for a predetermined period of time, is a blatant Ponzi scheme. However, the scheme, which disguises loans as funds used by a trading bot, has been very appealing to naive investors, as evidenced by the coin’s huge market capitalization of over US$2 billion and its longevity since the lending program began in January.
The rise of this scheme can be attributed to its marketing strategy, which the team itself brands as “aggressive”. The strategy has two parts. The first is an affiliate system that offers huge and liquid rewards for users who recruit new members and convince them to loan their Bitcoin. Unlike the loan returns, these affiliate rewards are continuously paid out, so successful recruiters can make massive and guaranteed profits. As a result, several popular YouTubers have falsely advertised this Ponzi to thousands of subscribers as a life-changing opportunity. The second part of BitConnect’s strategy involves rallies and ceremonies in which people who bought in early share their life-changing experiences about how BitConnect made them rich, freed them from debt, and so on.
For the uninformed investor, this all sounds like a wonderful opportunity. 1% daily payouts don’t seem too good to be true, and the idea of a trading bot generating profits seems plausible enough. However, beyond the obvious red flags, the scheme itself lacks substance and progress, further underlying the malicious nature of BitConnect. An obvious indicator is a quick comparison of the company’s 2017 road map with BitConnect’s GitHub activity throughout the year. While the road map offered (and claims it completed) over a dozen developments on the BitConnect code, there has been activity on just seven days out of the year, and on only three days since March.
Unfortunately, the naive investors that this scam targets are unaware of what to look for in a legitimate cryptocurrency project, and don’t recognize the signs of a Ponzi scheme. In a Facebook private group for new cryptocurrency investors to which I was recently invited, BitConnect is talked about daily. While many members cite Steemit posts and other articles exposing BitConnect for what it is, many others share personal anecdotes of the profits they’ve made lending on BCC and encourage new investors to give it a shot. This group is just one of many, and it’s likely many of the communities dominated by new investors are having similar discussions about this scam. Unfortunately, it’s possible the nature of BitConnect won’t be made clear to all until it’s run out of new money and goes dark along with all the money the newest investors have loaned out.


BTC: 1oj2fx1nBsRVyvgVaNpzYRgHtwtpdokar
LTC: 0xe2f3d016e0740c279d8521d04f63c1f9be4fe71e
ETH: Ldx5gmhVPkfUaq9mpV4KiMyF7KagHhLDbq
BCH: 1K6PmYwpLhsP8ubEYni5SksMuXoimoDYRv



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