15 ms·

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

by ve55 9y ago

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 9y ago
> 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-regulator/ http://www.nasaa.org/about-us/contact-us/contact-your-regula... [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.
- closeparen 9y ago
  Doesn’t fraud require deception? Wasn’t this pretty upfront about being a Ponzi scheme?
  - Iv 9y ago
    To have that line of defense, the youtubers would have had to phrase their claims very carefully. I am willing to bet a fistfull of dogecoin that this was not the case of all of them. Make them discover these actions have consequences, I can only see good sides to this.
    - JumpCrisscross 9y ago
      > the youtubers would have had to phrase their claims very carefully Ponzi schemes are one of those things you can't disclose your way out of. Sort of like HIPAA [1]. If you violate HIPAA, "we disclosed our non-compliance to the patient" is an inadequate--and borderline aggravating--excuse. [1] https://en.wikipedia.org/wiki/Health_Insurance_Portability_and_Accountability_Act https://en.wikipedia.org/wiki/Health_Insurance_Portability_a... Disclaimer: I am not a lawyer. This is not legal advice.
      - roel_v 9y ago
        Remind me, because your comments in this thread don't make it quite clear to me - are you a lawyer? Is this legal advice?
        Marazan 9y ago
        I believe the reasonable person test would result in a court coming to the conclusion that he had presented himself as neither a lawyer nor that he was giving legal advice. However, I am not a lawyer and this is not legal advice
        avip 9y ago
        I think one should say "neither he had... nor was he giving..." However, I am not a native English speaker and this is not a grammatical advice
- nradov 9y ago
  If you lost money in this scheme you are too stupid to live. Go hide your face in shame instead of wasting taxpayer money trying to fix your mistake. "A fool and his money are lucky enough to get together in the first place." - Gordon Gekko
  - ShabbosGoy 9y ago
    BitConnect executives should be jailed for one year per “BITCONNEEECCCCC” shouted.
  - QAPereo 9y ago
    That seems both cruel, and needlessly harsh. Surely you yourself have weaknesses which could be exploited, and I hope that you’re not prepared to kill yourself over it. By the same token, telling people that they are too stupid to live is pointlessly cruel, unhelpful, and frankly wrong. You can be intelligent, but old and suffering from MCI, or a more advanced dementia. You could be mentally ill, or brilliant in one field, but utterly ignorant of finances, or human nature. You could be a genius with TBI, or you could b young and foolish. I can’t see what you’re saying as anything other than venting of spleen. Maybe it makes you feel better as a mechanism to cope with frustration, but I’d encourage you to reconsider that attitude toward your fellow humans.
  - dang 9y ago
    This breaks the HN guidelines. Other people being dumb (assuming that's the case) is not a license to be brutal, and in any case you owe the community much better when commenting here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- nstj 9y ago
  > token amount :)
  - zerostar07 9y ago
    it appears it's a coin, not an (eth-)token
    - pc86 9y ago
      No. ETH does not own the word "token."
- drexlspivey 9y ago
  Most of them took down their videos by now
  - Fnoord 9y ago
    Google surely must have a copy, as well as Archive.org. These people benefitted from the scam; they should be held accountable as well.
    - ebikelaw 9y ago
      I love these comments because they highlight the ambivalence of the HN commentariat. If google actually had copies of deleted user data, the privacy-minded would lose their heads. And they’d be right because there are all kinds of laws around this. Deleted user data has to be really gone, even from backups, within a finite time.
      - toomuchtodo 9y ago
        There is no law (that I'm aware of in the US) that requires Google to purge any user data except GDPR (which applies only to EU residents after May 25, 2018), or perhaps the EU's "right to be forgotten" (which isn't going to supersede preserving evidence for an investigation). Those Youtube videos exist, if not with a "is_deleted" flag, in Youtube backups. Some are already in the Internet Archive.
      - zeven7 9y ago
        You put something up voluntarily on the open internet, you lose your right to keeping that thing private.
        deleted 9y ago
        [deleted]
      - simias 9y ago
        I'd rather websites did not keep my private data when I delete my account but I have no problem with the archival of public content. Of course with social networks pushing their users to overshare all the time the line can be pretty fuzzy with comment history and things like that but I don't see how anybody could consider archiving a video published on Youtube as a breach of user privacy.
- Nursie 9y ago
  In the UK it's likely that you should talk to Action Fraud, a Police-run service - https://www.actionfraud.police.uk/fraud_protection/ponzi_schemes https://www.actionfraud.police.uk/fraud_protection/ponzi_sch... And/Or contact the Financial Conduct Authourity. Pyramid and Ponzi schemes are illegal here too AFAICT.
  - celticninja 9y ago
    Yes this is correct, further the company was registered under 3 different names with companies House in the UK.
    - arethuza 9y ago
      Doesn't that just mean 3 different companies? It's not actually unusual for what you might think of as a single company actually to be a group of companies - e.g. a holding company and a set of subsidiaries.
      - celticninja 9y ago
        That's didn't seem to be the case, they looked like similarly named but distinctly different.
- geoffreyhale 9y ago
  This was a known ponzi scheme. Can participants actually recoup losses here? Shouldn't they be held just as accountable/guilty as any other participant?
  - thephyber 9y ago
    > This was a known ponzi scheme. What does it mean to be a _known_ ponzi scheme? How many people outside of the core conspirators are required for it to be reclassified from _suspected_ to _known_?
FLUX-YOU 9y ago
https://www.youtube.com/results?search_query=BitConnect+referral https://www.youtube.com/results?search_query=BitConnect+refe... Jesus, this is pretty blatant.
- ceejayoz 9y ago
  Several of the "get referrals!" videos literally use pyramids in their thumbnails to illustrate the program. Holy crap.
  - idbehold 9y ago
    The pyramid was literally on the Bitconnect FAQ page: https://youtu.be/wK0ztRcXvNQ?t=135 https://youtu.be/wK0ztRcXvNQ?t=135
    - saalweachter 9y ago
      I mean, this being the internet, it could have started as a tongue in cheek joke and then when the money started rolling in the founders just kind of went with it. Which I think is a potential lesson for HN readers: something can be funny, but still be fraud.
      - spookthesunset 9y ago
        No. My USDT is on them deliberately putting that crap on the site in order to weed out anybody with a functioning brain. It's kinda like Nigerian prince scammer emails are full of deliberate grammar and spelling errors. You gotta filter out the noise in your conversion funnel. Lots of crypto-coin stuff, including virtually all "name brand" crypto's, do the same thing. Most of the marketing is full of complete political, financial, and computer science nonsense. Anybody educated in any of those topics takes one look at the crypto space and goes "nope. sounds too good to be true. pass". What's left is a much more, shall we say, naïve set of marks to go after. You know, the kind that won't likely sue the shit out of those at the top of the pyramid... or even report them to the authorities. A very nice feature of Bitcoin is it specifically targets those with an anti-authoritarian bent--the kind who blather on about tax-theft, how the police should be deregulated, free market private industries and how the system of law should be replaced with cold, hard, unfeeling computer programs. If you were a scammer, wouldn't you want to target a group of people who wouldn't in a million years report you to the police? Good stuff. The "crypto space" is an amazing thing to watch. Never a dull moment.
dbcooper 9y ago
>other exchanges (of dubious reputation Yeah, HitBTC has the most volume, and it has a terrible reputation. See all the reports of "maintenance issues" when a coin traded there can be sold at a higher price on another exchange.
- bringtheaction 9y ago
  HitBTC sucks less than a lot of other exchanges IME. It's not my favorite exchange but it's decent enough that I rank it pretty highly. I have noticed that if you look at reviews for different exchanges, most will have a large amount of negative reviews. Some deserve it but I suspect that a lot of the reviews are not real - competing exchanges may have paid someone to write fake negative reviews. Not saying HitBTC is the best or anything. As an exercise, try this: Take the name of your absolute favorite exchange, combine it with the word "review" (sans quotation marks) and do a Google search for that. Look through the results.
- saas_co_de 9y ago
  Any exchange trading this crap should probably be avoided like the plague.
bhouston 9y ago
I noticed this other apparent BitConnect-like Ponzi scheme here: https://polynetwork.org https://polynetwork.org Funny thing, I noticed because it is using an old version of our 3D player on their home page (the 3D robot), and they are getting an incredible amount of traffic.
- allannienhuis 9y ago
  It's almost shocking how transparently dishonest they are. And yet people put real money (well, I suppose real bitcoins) into a black hole like this...
  - TeMPOraL 9y ago
    Through my experience watching people in MLMs (and getting way too close to the event horizon once), I learned that scammers and greedy people tend to hang out together (the latter usually becoming either victims or overzealous lieutenants of the scammers).
  - alien_at_work 9y ago
    Most investors knew Madoff was cheating some how, they just all assumed they would get out in time.
    - bonestamp2 9y ago
      Was bitconnect cheating though? I totally thought it was possible that they were a ponzi scheme until I ran my own bitcoin trading bot. But, don't take my word for... if you look at bitcoin trading bots that you can run yourself (many example on youtube of people running their own), bitconnect's return rate was significantly lower than typical bitcoin trading bots. So, if bitconnect was getting typical returns (and it's safe to say they should be getting at least 2%, which only puts them in the top ~60% of bitcoin bot operators), they could have been taking more than 1% for themselves and still returning their "high" level of returns -- without running any sort of ponzi scheme! Seeing my own bitcoin trading bot in action led me down the path of investigating stock trading bots and high speed trading within banks. The more I learned, the more I realized the real ponzi schemes are the national banks. That sounds crazy until you realize that with fractional reserve banking, they can take (for example) $1000 that you deposit and lend out 90% of it -- they only have to keep 10% of deposits deposits in reserve! Yet, most of them pay you less than 1%/year in interest. If I can make 4%/day on $1000 in my basement, how much do you think giant banks can make with your $1000? I would highly recommend running your own bitcoin trading bot if you've got $1000 to spare. I'll refrain from recommending a specific one for fear of sounding biased, but it will completely change your outlook on what bitconnect could be. More importantly, it'll probably make you a decent chunk of change that you can cash in at anytime (unlike bitconnect's CD model).
deleted 9y ago
[deleted]
taberiand 9y ago
The only question remaining is - how on earth is it still worth anything? Who is buying?
- dannyw 9y ago
  SEC seizing remaining assets (if any) and re-distributing then?
  - JumpCrisscross 9y ago
    > SEC seizing remaining assets (if any) and re-distributing then? That is unlikely to pay out to someone who bought after BitConnect was shut down. Generally speaking, when a regulator resoles a Ponzi scheme they take the promoter's assets and help put it into trust. That trust has two jobs. One, to sue those who sold their BCC before the scheme unraveled [1]. And two, to distribute cash to those who lost money. [1] http://www.newsweek.com/it-fair-sue-madoff-victims-who-made-profit-68923 http://www.newsweek.com/it-fair-sue-madoff-victims-who-made-...
- rsynnott 9y ago
  Remember when MtGox was transparently dead, and people were still sending in bitcoins? There are an awful lot of incredibly gullible people into this stuff.
StavrosK 9y ago
I know a few people who fell for this, despite my warnings. When you tell someone "these returns are astronomical, teams of PhDs in hedge funds cannot come anywhere close, do you think they're so dumb that they wouldn't put billions in this if it were legitimate" and they reply "yes, I do", there's no helping them.
- toomanybeersies 9y ago
  People love to think they're smarter than those 'experts'. It's a combination of Tall Poppy Syndrome [1] and the Dunning-Kruger Effect [2] [1] https://en.wikipedia.org/wiki/Tall_poppy_syndrome https://en.wikipedia.org/wiki/Tall_poppy_syndrome [2] https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
  - cfontes 9y ago
    You can add to that that "experts" are pretty clueless as well, 2000 and 2008 are reminders of that. Close to none saw it coming and the ones that did where laughing stock amongst them, you have to be a pretty remarkable person to swim against National bank presidents, government officials and other high ranking people like Alan Greenspan, that was a super respected economist but also has made some of the worst mistakes in history of the world economy and still has power to swing things around I really distrust any finance specialist, but I am also aware that if any high yield information ever reaches me it's either a crime or a scheme to take my money away from me. So it's tricky.
    - lsadam0 9y ago
      Perhaps then your definition of 'expert' is incorrect? Would it not be that the ones who saw it coming were really the experts? And those who laughed at them were anything but? I would argue that those who laughed at the doomsayers of 2000 & 2008 are the same as those now arguing that BitCoin can only go up. Your reply is a rather odd justification for self-destructive financial behavior.
tzahola 9y ago
So... it’s like a stupidity tax?
netsharc 9y ago
Do they get returns in Bitcoins too? E.g. "Get 5% more BTC every month"? That would be funny in "Geezus, you can't be that stupid!" kinda way.
- detaro 9y ago
  No, the returns are in the token that nobody else uses.
edkennedy 9y ago
> 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 One of the Youtubers, Cryptonick said clearly on his Youtube account that he was 17 years old. https://www.reddit.com/r/CryptoCurrency/comments/7r0ftz/cryptonick_is_deleting_all_of_his_bitconnect/ https://www.reddit.com/r/CryptoCurrency/comments/7r0ftz/cryp...
bonestamp2 9y ago
> Bitconnect was a Bitcoin-based ponzi-scheme Do you know that as a fact? I'm not trying to defend bitconnect, I just think it's dangerous living in a world where people state things as facts that have not been proven. People often cite the high rate of return from their trading bot as "proof" that they're a ponzi, but I don't buy that because run my own bitcoin trading bot and the returns are more than triple bitconnect's average. People much smarter than I who are running the same trading bot get even higher returns than I do. I think bitconnect's return rate was low because they were skimming the returns, which explains why they would take other people's money even though their bot works... because they can make even more by providing it as a service.
LrnByTeach 9y ago
This is text book ponzi scheme . > 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/

by ve55 9y ago

JumpCrisscross 9y ago

> 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-regulator/ http://www.nasaa.org/about-us/contact-us/contact-your-regula... [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.

closeparen 9y ago
Doesn’t fraud require deception? Wasn’t this pretty upfront about being a Ponzi scheme?
- Iv 9y ago
  To have that line of defense, the youtubers would have had to phrase their claims very carefully. I am willing to bet a fistfull of dogecoin that this was not the case of all of them. Make them discover these actions have consequences, I can only see good sides to this.
  - JumpCrisscross 9y ago
    > the youtubers would have had to phrase their claims very carefully Ponzi schemes are one of those things you can't disclose your way out of. Sort of like HIPAA [1]. If you violate HIPAA, "we disclosed our non-compliance to the patient" is an inadequate--and borderline aggravating--excuse. [1] https://en.wikipedia.org/wiki/Health_Insurance_Portability_and_Accountability_Act https://en.wikipedia.org/wiki/Health_Insurance_Portability_a... Disclaimer: I am not a lawyer. This is not legal advice.
    - roel_v 9y ago
      Remind me, because your comments in this thread don't make it quite clear to me - are you a lawyer? Is this legal advice?
      - Marazan 9y ago
        I believe the reasonable person test would result in a court coming to the conclusion that he had presented himself as neither a lawyer nor that he was giving legal advice. However, I am not a lawyer and this is not legal advice
        avip 9y ago
        I think one should say "neither he had... nor was he giving..." However, I am not a native English speaker and this is not a grammatical advice
nradov 9y ago
If you lost money in this scheme you are too stupid to live. Go hide your face in shame instead of wasting taxpayer money trying to fix your mistake. "A fool and his money are lucky enough to get together in the first place." - Gordon Gekko
- ShabbosGoy 9y ago
  BitConnect executives should be jailed for one year per “BITCONNEEECCCCC” shouted.
- QAPereo 9y ago
  That seems both cruel, and needlessly harsh. Surely you yourself have weaknesses which could be exploited, and I hope that you’re not prepared to kill yourself over it. By the same token, telling people that they are too stupid to live is pointlessly cruel, unhelpful, and frankly wrong. You can be intelligent, but old and suffering from MCI, or a more advanced dementia. You could be mentally ill, or brilliant in one field, but utterly ignorant of finances, or human nature. You could be a genius with TBI, or you could b young and foolish. I can’t see what you’re saying as anything other than venting of spleen. Maybe it makes you feel better as a mechanism to cope with frustration, but I’d encourage you to reconsider that attitude toward your fellow humans.
- dang 9y ago
  This breaks the HN guidelines. Other people being dumb (assuming that's the case) is not a license to be brutal, and in any case you owe the community much better when commenting here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
nstj 9y ago
> token amount :)
- zerostar07 9y ago
  it appears it's a coin, not an (eth-)token
  - pc86 9y ago
    No. ETH does not own the word "token."
drexlspivey 9y ago
Most of them took down their videos by now
- Fnoord 9y ago
  Google surely must have a copy, as well as Archive.org. These people benefitted from the scam; they should be held accountable as well.
  - ebikelaw 9y ago
    I love these comments because they highlight the ambivalence of the HN commentariat. If google actually had copies of deleted user data, the privacy-minded would lose their heads. And they’d be right because there are all kinds of laws around this. Deleted user data has to be really gone, even from backups, within a finite time.
    - toomuchtodo 9y ago
      There is no law (that I'm aware of in the US) that requires Google to purge any user data except GDPR (which applies only to EU residents after May 25, 2018), or perhaps the EU's "right to be forgotten" (which isn't going to supersede preserving evidence for an investigation). Those Youtube videos exist, if not with a "is_deleted" flag, in Youtube backups. Some are already in the Internet Archive.
    - zeven7 9y ago
      You put something up voluntarily on the open internet, you lose your right to keeping that thing private.
      - deleted 9y ago
        [deleted]
    - simias 9y ago
      I'd rather websites did not keep my private data when I delete my account but I have no problem with the archival of public content. Of course with social networks pushing their users to overshare all the time the line can be pretty fuzzy with comment history and things like that but I don't see how anybody could consider archiving a video published on Youtube as a breach of user privacy.
Nursie 9y ago
In the UK it's likely that you should talk to Action Fraud, a Police-run service - https://www.actionfraud.police.uk/fraud_protection/ponzi_schemes https://www.actionfraud.police.uk/fraud_protection/ponzi_sch... And/Or contact the Financial Conduct Authourity. Pyramid and Ponzi schemes are illegal here too AFAICT.
- celticninja 9y ago
  Yes this is correct, further the company was registered under 3 different names with companies House in the UK.
  - arethuza 9y ago
    Doesn't that just mean 3 different companies? It's not actually unusual for what you might think of as a single company actually to be a group of companies - e.g. a holding company and a set of subsidiaries.
    - celticninja 9y ago
      That's didn't seem to be the case, they looked like similarly named but distinctly different.
geoffreyhale 9y ago
This was a known ponzi scheme. Can participants actually recoup losses here? Shouldn't they be held just as accountable/guilty as any other participant?
- thephyber 9y ago
  > This was a known ponzi scheme. What does it mean to be a _known_ ponzi scheme? How many people outside of the core conspirators are required for it to be reclassified from _suspected_ to _known_?

FLUX-YOU 9y ago

https://www.youtube.com/results?search_query=BitConnect+referral https://www.youtube.com/results?search_query=BitConnect+refe... Jesus, this is pretty blatant.

ceejayoz 9y ago
Several of the "get referrals!" videos literally use pyramids in their thumbnails to illustrate the program. Holy crap.
- idbehold 9y ago
  The pyramid was literally on the Bitconnect FAQ page: https://youtu.be/wK0ztRcXvNQ?t=135 https://youtu.be/wK0ztRcXvNQ?t=135
  - saalweachter 9y ago
    I mean, this being the internet, it could have started as a tongue in cheek joke and then when the money started rolling in the founders just kind of went with it. Which I think is a potential lesson for HN readers: something can be funny, but still be fraud.
    - spookthesunset 9y ago
      No. My USDT is on them deliberately putting that crap on the site in order to weed out anybody with a functioning brain. It's kinda like Nigerian prince scammer emails are full of deliberate grammar and spelling errors. You gotta filter out the noise in your conversion funnel. Lots of crypto-coin stuff, including virtually all "name brand" crypto's, do the same thing. Most of the marketing is full of complete political, financial, and computer science nonsense. Anybody educated in any of those topics takes one look at the crypto space and goes "nope. sounds too good to be true. pass". What's left is a much more, shall we say, naïve set of marks to go after. You know, the kind that won't likely sue the shit out of those at the top of the pyramid... or even report them to the authorities. A very nice feature of Bitcoin is it specifically targets those with an anti-authoritarian bent--the kind who blather on about tax-theft, how the police should be deregulated, free market private industries and how the system of law should be replaced with cold, hard, unfeeling computer programs. If you were a scammer, wouldn't you want to target a group of people who wouldn't in a million years report you to the police? Good stuff. The "crypto space" is an amazing thing to watch. Never a dull moment.

dbcooper 9y ago

>other exchanges (of dubious reputation Yeah, HitBTC has the most volume, and it has a terrible reputation. See all the reports of "maintenance issues" when a coin traded there can be sold at a higher price on another exchange.

bringtheaction 9y ago
HitBTC sucks less than a lot of other exchanges IME. It's not my favorite exchange but it's decent enough that I rank it pretty highly. I have noticed that if you look at reviews for different exchanges, most will have a large amount of negative reviews. Some deserve it but I suspect that a lot of the reviews are not real - competing exchanges may have paid someone to write fake negative reviews. Not saying HitBTC is the best or anything. As an exercise, try this: Take the name of your absolute favorite exchange, combine it with the word "review" (sans quotation marks) and do a Google search for that. Look through the results.
saas_co_de 9y ago
Any exchange trading this crap should probably be avoided like the plague.

bhouston 9y ago

I noticed this other apparent BitConnect-like Ponzi scheme here: https://polynetwork.org https://polynetwork.org Funny thing, I noticed because it is using an old version of our 3D player on their home page (the 3D robot), and they are getting an incredible amount of traffic.

allannienhuis 9y ago
It's almost shocking how transparently dishonest they are. And yet people put real money (well, I suppose real bitcoins) into a black hole like this...
- TeMPOraL 9y ago
  Through my experience watching people in MLMs (and getting way too close to the event horizon once), I learned that scammers and greedy people tend to hang out together (the latter usually becoming either victims or overzealous lieutenants of the scammers).
- alien_at_work 9y ago
  Most investors knew Madoff was cheating some how, they just all assumed they would get out in time.
  - bonestamp2 9y ago
    Was bitconnect cheating though? I totally thought it was possible that they were a ponzi scheme until I ran my own bitcoin trading bot. But, don't take my word for... if you look at bitcoin trading bots that you can run yourself (many example on youtube of people running their own), bitconnect's return rate was significantly lower than typical bitcoin trading bots. So, if bitconnect was getting typical returns (and it's safe to say they should be getting at least 2%, which only puts them in the top ~60% of bitcoin bot operators), they could have been taking more than 1% for themselves and still returning their "high" level of returns -- without running any sort of ponzi scheme! Seeing my own bitcoin trading bot in action led me down the path of investigating stock trading bots and high speed trading within banks. The more I learned, the more I realized the real ponzi schemes are the national banks. That sounds crazy until you realize that with fractional reserve banking, they can take (for example) $1000 that you deposit and lend out 90% of it -- they only have to keep 10% of deposits deposits in reserve! Yet, most of them pay you less than 1%/year in interest. If I can make 4%/day on $1000 in my basement, how much do you think giant banks can make with your $1000? I would highly recommend running your own bitcoin trading bot if you've got $1000 to spare. I'll refrain from recommending a specific one for fear of sounding biased, but it will completely change your outlook on what bitconnect could be. More importantly, it'll probably make you a decent chunk of change that you can cash in at anytime (unlike bitconnect's CD model).

deleted 9y ago

[deleted]

taberiand 9y ago

The only question remaining is - how on earth is it still worth anything? Who is buying?

dannyw 9y ago
SEC seizing remaining assets (if any) and re-distributing then?
- JumpCrisscross 9y ago
  > SEC seizing remaining assets (if any) and re-distributing then? That is unlikely to pay out to someone who bought after BitConnect was shut down. Generally speaking, when a regulator resoles a Ponzi scheme they take the promoter's assets and help put it into trust. That trust has two jobs. One, to sue those who sold their BCC before the scheme unraveled [1]. And two, to distribute cash to those who lost money. [1] http://www.newsweek.com/it-fair-sue-madoff-victims-who-made-profit-68923 http://www.newsweek.com/it-fair-sue-madoff-victims-who-made-...
rsynnott 9y ago
Remember when MtGox was transparently dead, and people were still sending in bitcoins? There are an awful lot of incredibly gullible people into this stuff.

StavrosK 9y ago

I know a few people who fell for this, despite my warnings. When you tell someone "these returns are astronomical, teams of PhDs in hedge funds cannot come anywhere close, do you think they're so dumb that they wouldn't put billions in this if it were legitimate" and they reply "yes, I do", there's no helping them.

toomanybeersies 9y ago
People love to think they're smarter than those 'experts'. It's a combination of Tall Poppy Syndrome [1] and the Dunning-Kruger Effect [2] [1] https://en.wikipedia.org/wiki/Tall_poppy_syndrome https://en.wikipedia.org/wiki/Tall_poppy_syndrome [2] https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
- cfontes 9y ago
  You can add to that that "experts" are pretty clueless as well, 2000 and 2008 are reminders of that. Close to none saw it coming and the ones that did where laughing stock amongst them, you have to be a pretty remarkable person to swim against National bank presidents, government officials and other high ranking people like Alan Greenspan, that was a super respected economist but also has made some of the worst mistakes in history of the world economy and still has power to swing things around I really distrust any finance specialist, but I am also aware that if any high yield information ever reaches me it's either a crime or a scheme to take my money away from me. So it's tricky.
  - lsadam0 9y ago
    Perhaps then your definition of 'expert' is incorrect? Would it not be that the ones who saw it coming were really the experts? And those who laughed at them were anything but? I would argue that those who laughed at the doomsayers of 2000 & 2008 are the same as those now arguing that BitCoin can only go up. Your reply is a rather odd justification for self-destructive financial behavior.

tzahola 9y ago

So... it’s like a stupidity tax?

netsharc 9y ago

Do they get returns in Bitcoins too? E.g. "Get 5% more BTC every month"? That would be funny in "Geezus, you can't be that stupid!" kinda way.

detaro 9y ago
No, the returns are in the token that nobody else uses.

edkennedy 9y ago

> 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 One of the Youtubers, Cryptonick said clearly on his Youtube account that he was 17 years old. https://www.reddit.com/r/CryptoCurrency/comments/7r0ftz/cryptonick_is_deleting_all_of_his_bitconnect/ https://www.reddit.com/r/CryptoCurrency/comments/7r0ftz/cryp...

bonestamp2 9y ago

> Bitconnect was a Bitcoin-based ponzi-scheme Do you know that as a fact? I'm not trying to defend bitconnect, I just think it's dangerous living in a world where people state things as facts that have not been proven. People often cite the high rate of return from their trading bot as "proof" that they're a ponzi, but I don't buy that because run my own bitcoin trading bot and the returns are more than triple bitconnect's average. People much smarter than I who are running the same trading bot get even higher returns than I do. I think bitconnect's return rate was low because they were skimming the returns, which explains why they would take other people's money even though their bot works... because they can make even more by providing it as a service.

LrnByTeach 9y ago

This is text book ponzi scheme . > 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/