Following Regulatory Pressure, BitConnect Will Terminate its Lending and Exchange Platforms
After months of community skepticism and scrutiny, BitConnect is closing its doors. The popular Bitcoin investment platform has long come under fire for its dubious business model, promises of daily 1% returns on investment, and lack of team transparency. Some have even branded the project as a scam, likening it a textbook ponzi scheme.
— Michael Novogratz (@novogratz) November 30, 2017
I've been asked what I think about BitConnect. From the surface, seems like a classic ponzi scheme. I wouldn't invest in it and wouldn't recommend anyone else to.
I follow this rule of thumb:
"If it looks like a 🦆, walks like a 🦆, and quacks like a 🦆, then it's a ponzi." 😂
— Charlie Lee [LTC] (@SatoshiLite) November 30, 2017
Pulling an Exit Scam?
EDIT: Since publishing, BitConnect has removed the mentioned blog post from their website.
A recent blog post on the BitConnect website, which “inform[s] all community members that [team members] are closing the Bitconnect [sic] lending and exchange platform,” may confirm these long-held suspicions. The write-up outlines the specifics of the service’s termination:
“We are closing the lending operation immediately with the release of all outstanding loans. With [sic] release of your entire active loan in the lending wallet we are transferring all your lending wallet balance to your BitConnect wallet balance at 363.62 USD. This rate has been calculated based on last 15 days averages of the closing price registered on coinmarketcap.com. You are free to withdraw your BitConnect coin currently in QT wallets that was used for staking as well. We are also closing BCC exchange platform in 5 days.”
While lending will cease immediately, followed by a closure of BitConnect’s exchange in five days, the “BitConnect.co website will operate for wallet service, news and educational purposes,” the post reveals.
The team continues to offer three distinct explanations driving their decision to nix the company’s hallmark platforms. One such reason includes a slew of “bad press” that “has made community members uneasy and created a lack of confidence in the platform.”
This bad press was born from three separate cease and desist orders from the UK government, the North Carolina Securities Division, and the Texas State Securities Board. BitConnect sites the latter two in their second explanation, arguing that these developments created “a hindrance for the legal continuation of the platform.”
Finally, the company also argues that a series of distributed denial of service (DDoS) attacks “have made the platform unstable and have created more panic inside the community.”
We've been under continuous DDoS attack which inevitably affects our service. We're mitigating as fast as we can.
It may take up to 24 hours. Will update you once it is under control. We apologize for any inconvenience this may cause @bitconnect
— BitConnect (@bitconnect) January 13, 2018
Strangely, even with the cessation of its lending and exchange platforms, BitConnect “will [not] stop supporting BitConnect coin.” With its exchange and lending services kaput, BitConnect’s coin loses all practical functionality, but the team hopes for “Bitconnect to be listed on outside exchanges giving more options for trading.”
Following the announcement, BitConnect plummeted in price on CoinMarketCap. At press time, its current price sits at $43.83.
With the prices of Bitcoin (BTC) and other altcoins (alternative cryptocurrencies) surging as cryptos become more mainstream,…
As more people enter the cryptocurrency ecosystem than ever, it’s important to rehash a few common concerns about keeping cryptocurrency safe. Many beginner to intermediate-level users wonder whether or not they should have a dedicated cryptocurrency wallet for each digital asset. One of the best ways to guarantee security, beyond taking the usual precautions like…
ABOUT THE AUTHOR
ABOUT THE AUTHOR
Colin is a freelance writer and crypto-enthusiast based in Nashville, TN. When he’s not speculating crypto futures, he’s probably letting his hair down and/or heading to a music festival–because stereotypes exist for a reason.