BitConnect -- A Classic CryptoScam

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Avatar for BetterCallPaul
3 years ago

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.

NOTE TO READ.CASH CREW: This IS absolutely original content. I understand that your filter that looks for similarities may be interpreting my reposting of my own article onto my personal blog here at read.cash as a "match" and thus, "not original content," but I assure you, I am the person who wrote this article originally, as seen here: https://www.publish0x.com/better-call-paul/naming-names-a-study-of-cryptoscams-xqdyrn. I am RE-publishing here legally by giving my self the rights to publish my own article. Please do not tell me that my own article is not my own original content again, because it is!

References/Source Material:

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

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$ 0.51
$ 0.51 from @Koush
Avatar for BetterCallPaul
3 years ago

Comments

The website marks content automatically. If you cannot publish your articles here first, to be marked as original content, you can still simply tell the reader, that you have published this article on another platform.

If you have built enough trust and can easily prove, that you are the creator (like you did here) people will be happy to tip you regardless.

I would still advice you publishing new content on read.cash first and then publishing it on your other pages. This way you will receive all the activity points for your post.

Please understand, that this is an anti spam measure and there is no way to 100% prove beyond any reasonable doubt, that this is original content, other than to post it here first. You'll make it easier for read.cash developers and readers as well as yourself, if you do it this way.

Thank you for your post!

$ 0.00
3 years ago

I can absolutely prove that it's my content. I'm a paralegal and deal with copyright law all the time. I have a separate log of everything I write with the dates I published and where it was published, and I enforce the copyright protections afforded to me under the Copyright Act (US), meaning I go after people who infringe.

And the sad part is -- the only reason it failed was because my original posting on Publish0x got widespread attention. I've reposted other articles I've posted there first that had way less views....no problem whatsoever.

Meaning I am being punished for being successful, lol....it's all good. It's just someone suggested that BitConnect would be a good topic for this community, and I thought, "Done, because, well...I've already written one!" I then got my handy-dandy mouse and copied my own words, updated a few things, and posted....

So, I guess it's just up to my readers to circulate this...:)

$ 0.02
3 years ago

I think it is pretty clear for the most part, that you are the original content creator. But that is neither, what I or read.cash is getting at.

They explain in details here how and why they put in a copy-paste protection https://read.cash/@Read.Cash/copy-paste-protection-c4bd5de3

and I tend to support their idea. You can certainly tell other readers, that you are OC but that means that they rely on trusting you. It may impact your tips and also set a bad precedent. You also don't get activity points, which could lead to 'passive' tips income.

If you have all the legal information, you might have a chance, but then again, you're asking for them to verify, which takes away precious time to build on this platform.

So while I completely understand your point and trust you to be OC, I would still suggest to simply publish all your future content here first to verify OC in one swoop, without any legal documentation necessary.

Good luck!

$ 0.00
3 years ago

Oh, I completely understand it, and I'm not going to fight anything to have it verified. I can just rewrite the article in way less time than it would take to challenge such. My issue was that readers who see "Non-Original" on it may immediately think that I am stealing articles, at which point, my reputation would be irreparably harmed and then it's a whole other ballgame.

My thoughts -- read.cash, if things are going to continue like this, perhaps instead of marking "NON-OC," you should just leave it blank and keep the "OC" on the ones that the filter allows. You are attaching legal jeopardy to your company by opening yourselves up to a defamation of character claim.

....better yet, I have a great idea. I am going to put my thoughts on this issue into an article instead of a comment, as I have at least an article's worth of relevant feedback on the issue.

$ 0.02
3 years ago

good idea. Also if you try to mention them, this is how it works: @ Read.Cash (case sensitive and without the space)

$ 0.00
3 years ago

The famous Bitconnect scam. Yep I followed it and all its youtube proponents like Trevon, Crypto ice and AI. And I wasn't aware they had track some of the founders/staff down. I would disagree on one point however. It was an obvious scam with a pyramid and ridiculous daily %. Great coverage of the scam. Hope you made back the losses :)

$ 0.00
3 years ago

By the way, this is my original content, the censors just caught it because it's a reposting of an article I wrote on Publish0x first that got widespread attention. Now that they have marked it "Non-OC," I feel like my readers are going to get the impression I plagiarized, which is so, so not the case. Thought it wise to note this in the first response I've made to a reader in these comments.

Thanks for reading!

$ 0.00
3 years ago