BitConnect is closing its cryptocurrency lending and exchange platform following orders from US authorities. BitConnect an anonymously-run lending and exchange platform is actually a fraudulent investment operation generating returns for older investors through revenue paid by new investors, i.e, a Ponzi scheme.
They say the poop never falls far from the backside, but the story of Bitconnect’s epic collapse should serve as a cautionary tale for every investor.
In a statement, the anonymous owners said the lending sector of the company has been closed with immediate effect, and all outstanding loans have been released
Active loans are being transferred to wallets in BitConnect Coins (BCC) at a rate of $363.62, a rate gathered from a 15-day average.
However, users are reporting that they are unable to access their funds through the exchange, leaving them without the ability to transfer BCC which powers the platform and has now collapsed in price.
The price of BCC tanked to $19.28 on the close of 16 January from an all-time high of $463 in December 2017. At the time of writing, BCC is worth $15.94.
Such a collapse has brutal effects on some investors.
Not a long time ago, in what can now be called an ironical statement Bitconnect issued on November 24th 2017 a warning to its clients about frauds. Using the moral principles and attention to grammar of a Nigerian Prince the Bitconnect team said:
“We have seen a number of ICO’s conducted as part of which multiple million dollars have been raised for seemingly good projects but, subsequent to issue, the companies in question have reportedly gone “dark” and failed to execute on any of the milestones presented in the white paper that drew the initial investment.” The fraudulent exchange kept going “Chances are this won’t be the last of this sort of activity that we see hit the ICO space over the coming 12 months or so. While regulation isn’t ideal, it’s seemingly necessary as a layer of protection against fraudulent activity going forward.”
May this be a call to greater transparency in exchanges and for more demanding investors who do not accept lending money to anonymously-ran companies.