
BitConnect Closes Exchange as States Warn of Unregulated Sales - JumpCrisscross
https://www.bloomberg.com/news/articles/2018-01-16/bitconnect-closes-exchange-as-states-warn-of-unregulated-sales
======
ve55
For those unaware, Bitconnect was a Bitcoin-based ponzi-scheme that had
operated 'successfully' for quite some time. I don't say 'ponzi' as an insult
in the way some do for cryptocurrencies, it was quite literally just a bare-
bones ponzi scheme, where you deposit your money (Bitcoin) on their website,
buy their token, 'lock' your funds for some amount of time, and you are
promised very high interest rates while encouraged to re-invest your returns.

What has happened today is Bitconnect has closed the exchange on their
website, and so users flocked to some of the only other exchanges (of dubious
reputation, since no reputable exchange wanted to list the BitConnect coin) in
order to sell their now-worthless tokens, resulting in losses of around 90%
today:
[https://coinmarketcap.com/currencies/bitconnect/](https://coinmarketcap.com/currencies/bitconnect/)

Many famous Youtubers and other individuals with influence convinced hundreds
of people to put their money into BitConnect in order to profit off of
referrals, leading to a lot of unfortunate losses and a lot of delusion and
misinformation among devoted investors. The general sentiment towards those
that lost money due to BitConnect has been a mocking attitude in the
cryptocurrency investment communities, as BitConnect has been referred to by
many as a blatant ponzi scheme for months.

~~~
JumpCrisscross
> _Famous Youtubers and other individuals with influence convinced hundreds of
> people to put their money into BitConnect in order to profit off of
> referrals_

If you lost money in this scheme and are in the United States or Canada,
contact your state securities regulator [1]. Mention any such referral
sources. Those individuals may be liable for securities fraud under state and
federal law.

If you're in the United States, send a copy to the SEC [2]. If you lost more
than a token amount, I would also recommend contacting an attorney.

[1] [http://www.nasaa.org/about-us/contact-us/contact-your-
regula...](http://www.nasaa.org/about-us/contact-us/contact-your-regulator/)

[2]
[https://www.sec.gov/complaint/select.shtml](https://www.sec.gov/complaint/select.shtml)

 _Disclaimer: I am not a lawyer. This is not legal advice._

~~~
drexlspivey
Most of them took down their videos by now

~~~
lhl
@Bitfinexed [1], who tracks all kinds of scams (the Tether one is going to be
the real doozy when that unravels) has been diligently saving Bitconnect
videos, tweets, etc. He is pseudononymous, so the question now is how to
effectively get these (apparently) hundreds of gigs of videos archived/shared.
[2] I can't imagine he's the only one to have thought to do this, though.
Bitconnect was simply too blatant of a skeezy ponzi for _no one_ to have
bothered tracking down who all these people were...

[1] [https://twitter.com/Bitfinexed](https://twitter.com/Bitfinexed)

[2]
[https://twitter.com/Bitfinexed/status/953510174244986880](https://twitter.com/Bitfinexed/status/953510174244986880)

~~~
toomuchtodo
They should get in touch with Jason Scott or Archive Team in general to get
them in the Internet Archive, or upload them to the Internet Archive
themselves.

EDIT: I don't have Twitter, if someone wouldn't mind, could they connect
@Bitfinexed to @textfiles?

------
TaylorGood
Worse, fake BitConnect support accounts on Twitter are “helping users
expedite” BCC to BTC by having them send their BCC to these pop up Twitter
accounts. One has over 30k BCC. Yes the price crashed but still..

@bitconnectw
[https://twitter.com/bitconnectw/status/953432382119514112](https://twitter.com/bitconnectw/status/953432382119514112)

@bitconnectstaff
[https://twitter.com/bitconnectstaff/status/95333597084946430](https://twitter.com/bitconnectstaff/status/95333597084946430)

@bitconnect_team
[https://twitter.com/bitconnect_team/status/95340164519865139...](https://twitter.com/bitconnect_team/status/953401645198651392)

@bitconnectteam
[https://twitter.com/bitconectteam/status/953500671558512640](https://twitter.com/bitconectteam/status/953500671558512640)

~~~
notahacker
5 hours later some of them have gone down and others are still up. You'd think
Twitter's fraud team might have had a few tip offs...

------
znebby
I'm just going to leave this here:
[https://www.youtube.com/watch?v=kbR1SXIje1U](https://www.youtube.com/watch?v=kbR1SXIje1U)

~~~
avenoir
Hard to believe that people watched this and still invested in this shitshow.

~~~
Fnoord
I've been to a MLM conference once (or well, a conference by a company who
distributed purely via MLM) and I saw people buying into it as well. When I
googled them (this was back around 2006), I saw tons of domains and websites
with these products all from people with their own "company" (lol).

You know what sells? Sampling, and success stories. The first thing I got told
is that I must believe in the product. Yeah, that's true with any product, but
where's the proof? Well, you can convince people with sampling. As for the
success stories, people high on the pyramid are around at these conferences as
well. The brother of my aunt (cold side) had earned more than a million with
this MLM scheme. Which got me to check out the conference in the first place.
At the conference he appeared to be well respected within the scene. I didn't
know this beforehand (my aunt told me _afterwards_ even though she got me in
contact with him) but what did he do before that? Well, he was in a cult. Now
he was a hardcore Christian in a MLM scheme. As they say, "the apple doesn't
fall far from the tree."

I'm not _at all_ surprised there's these MLM-esque videos related to
cryptocurrency out there. As far's I'm concerned, BitConnect is just the tip
of the iceberg. We haven't witnessed the mask falling from Tether yet (many
red flags have been raised though), nor Bitcoin in general (many red flags as
well). Bitcoin value has been going _down_ the past days, btw, even _before_
BitConnect announcement. You can esp see the decline from Jan 15.

~~~
TeMPOraL
Had a very similar experience - a friend of our family (also a member of a,
let's call it, high-intensity christian denomination) got started in a MLM
(MonaVie) and invited me to their "internal" event (one aimed at people
already in the network).

Oh. My. God. What I saw there was a textbook definition of a cult, a pure
affective death spiral[0] instantiated in our material world. People were
literally one-upping one another in telling how happy they are by being the
part of this MLM, and how happy they will be when it makes them rich. The
overall atmosphere was pretty similar to that Bitconeeeeeeeeeect video.

> _The first thing I got told is that I must believe in the product._

Yeah, that's the thing that kept me from getting recruited into MLMs back when
I was more naïve about people involved - I could tell the products were
bullshit, and selling them required you to lie about either the qualities of
the product or your expertise on the topic (in case of financial products).
Both of which I find to be _despicable_ behaviour.

\--

[0] -
[https://wiki.lesswrong.com/wiki/Affective_death_spiral](https://wiki.lesswrong.com/wiki/Affective_death_spiral)

"An affective death spiral (or happy death spiral) occurs when positive
attributes of a theory, person, or organization combine with the Halo effect
in a feedback loop, resulting in the subject of the affective death spiral
being held in higher and higher regard. In effect, every positive thing said
about the subject results in more than one additional nice thing to say about
the subject on average. This cascades like a nuclear chain reaction."

~~~
arethuza
I'd never heard of MonaVie so I Google'd it and read the Wikipedia page - was
slightly surprised to get Amazon adverts for $40 bottles of fruit juice at the
same time....

~~~
TeMPOraL
Fortunately, they seem to be defunct now. Good riddance.

------
keyle
On the one side you've got an exciting unregulated universe developing at a
very fast pace (with some really dodgy characters). On the other side you've
got the traditional press, government and banking world, half tempted to
embrace it but scared and quick to dismiss it... In the middle are the pundits
mostly losing money.

It's a great time to be alive, this time will definitely be remembered in a
few years, like the dot-com boom is.

~~~
jrochkind1
either that or like the housing bubble is remembered.

------
sitepodmatt
One scam down at least, next the Tether printer and BitFinex boys. Clean up in
aisle HKG please.

~~~
Alex3917
Tether just hit a new all time high of $1.07, making the return on investment
significantly better than most VC funds.

~~~
mcintyre1994
Isn't the entire point of it to be pegged 1USDT === 1USD? Obviously it fails
at that by being backed by nothing like enough USD, but what does it being
worth $1.07 even mean? Also, where do you sell Tethers given Bitfinex won't
exchange them for USD?

~~~
benmmurphy
doesn't the fact that its trading at 1.07 mean that tether doesn't have easy
access to USD or an easy way to exploit the arbitrage. tether as a company can
take USD and print tethers. so they could take USD $100, print 100 tethers,
exchange them for USD $107 and walk away with $7 profit. i don't think people
would even be mad if they did this. this is exactly what they should be doing
to preserve the peg.

~~~
makomk
People have, in fact, been getting mad when it appears they may have been
doing this because people are weird like that. (Though I don't think there's
enough market depth for that particular Tether-related arbitrage to be
profitable, unlike some of the other options.)

------
dreit1
They did give arguably one of the best memes in the cryptocurrency community
though. [1] I'm sure you will see many a cryptocurrency thread today with some
variant BITCONNNNNEEEEEECCCCC as a top rated comment.

[1]
[https://www.youtube.com/watch?v=kbR1SXIje1U](https://www.youtube.com/watch?v=kbR1SXIje1U)

------
brndnmtthws
BitConnect is definitely a ponzi, but I think this sets the wrong precedent.
Exchanges should have voluntarily delisted BCC (many already have, but it
still trades on some markets and is listed on coinmarketcap) rather than being
forced by threats from the government. This gives regulators credence as our
protectors and suggests they will try these strongarm tactics again in the
future.

~~~
ceejayoz
The regulators exist because the entire history of our financial and legal
system demonstrates that companies frequently don't "voluntarily" do the right
thing when there's money to be made.

~~~
Xylakant
Reference: Why mattresses come with warning tags [http://nowiknow.com/why-
mattresses-come-with-warning-tags/](http://nowiknow.com/why-mattresses-come-
with-warning-tags/)

------
aesthethiccs
I don't even feel a little bit bad, there was repeated warnings about it being
a scam. even the website code itself has been used in other scam ico's.

------
rdiddly
Nice to see a photo of something other than two golden Bitcoins. People who
take & sell photographs of golden Bitcoins must be making almost as much money
as Bitcoin investors, jeez.

~~~
lagadu
I'm interested in investing in this golden bitcoin phography business. Will
there be an ICO?

~~~
dagw
Of course! Step right up:
[https://www.kodak.com/kodakone/default.htm](https://www.kodak.com/kodakone/default.htm)

------
swang
maybe all the posts below are fake. i hope they are. kinda sad how many people
were fooled into this so easily.

[https://twitter.com/francispouliot_/status/95346257940123238...](https://twitter.com/francispouliot_/status/953462579401232386)

~~~
ufo
The chicken nuggets one is likely fake. That is an old meme / copypasta.

Dunno about the rest.

------
KasianFranks
I'm personally looking forward to these scams being weeded out. It's going to
make the world of crypto even stronger.

~~~
Analemma_
How many different ways are there to say “actually this is good for Bitcoin”?

------
yorby
Did this trigger the drop of all other coins? it happened right about the same
time...

------
shultays
I don't understand the law here. Are ponzis only illegal when you make money
on it? How all those 'victims' are able to sue 'scammers' while only
difference is they were late to the scheme?

------
thisisit
To think they had a marketcap of $2.4 billion:

[https://coinmarketcap.com/historical/20171231/](https://coinmarketcap.com/historical/20171231/)

------
homero
I wonder what happened to the onecoin scam

------
redsec
Finally

------
andirk
A couple people I follow have called it a complete ponzi scheme for months. I
hope those behind this get what they deserve: a lot of bitcoin and a lot of
flaming paper bags on their porch.

