Jump to content

Bitconnect: Difference between revisions

From Wikipedia, the free encyclopedia
Browse history interactively
← Previous editNext edit →
Content deleted Content added
VisualWikitext
No edit summary
Line 47: Line 47:
Bitconnect was released in 2016 with the goal of allowing users to lend the value of Bitconnect coin in return for interest payments. The marquis program was the so-called lending platform where users traded Bitcoin for Bitconnect Coin and could lock in the instantaneous value of the coin for a set period of time while earning interest calculated daily. The interest payouts were determined by a so-called "trading bot". The trading bot was the most controversial piece of the Bitconnect.co system. However, as users have pointed out the payouts were actually calculated as a fraction of the open and close price of Bitcoin with a cap in maximum interest. The liquidity of the BCC cryptocurrency funded users ability to exchange their earnings for Bitcoin.
Bitconnect was released in 2016 with the goal of allowing users to lend the value of Bitconnect coin in return for interest payments. The marquis program was the so-called lending platform where users traded Bitcoin for Bitconnect Coin and could lock in the instantaneous value of the coin for a set period of time while earning interest calculated daily. The interest payouts were determined by a so-called "trading bot". The trading bot was the most controversial piece of the Bitconnect.co system. However, as users have pointed out the payouts were actually calculated as a fraction of the open and close price of Bitcoin with a cap in maximum interest. The liquidity of the BCC cryptocurrency funded users ability to exchange their earnings for Bitcoin.


The following is an excerpt from the details and instructions of the Bitconnect Lending platform: <ref>https://web.archive.org/web/20171119183834/https://bitconnect.co/bitcoin-information/19/investing-in-bitconnect-lending</ref>
The following is an excerpt from the details and instructions of the Bitconnect Lending platform: <ref>{{cite web|url=https://bitconnect.co/bitcoin-information/19/investing-in-bitconnect-lending|archive-url=https://web.archive.org/web/20171119183834/https://bitconnect.co/bitcoin-information/19/investing-in-bitconnect-lending|title=Investing in BitConnect Lending - Bitconnect|archive-date=19 November 2017|website=bitconnect.co}}</ref>


{{cquote|Bitconnect lending: You can invest BitConnect coin in Bitconnect lending platform exclusively from the BitConnect Dashboard. This investment option involves profiting from Bitconnect trading bot and volatility software. You will receive daily profit based on your investment option. Upon investment term completion, you will receive your CAPITAL BACK to take out from the Bitconnect lending platform or optionally reinvest back in lending platform to continue receiving daily profit.}}
{{cquote|Bitconnect lending: You can invest BitConnect coin in Bitconnect lending platform exclusively from the BitConnect Dashboard. This investment option involves profiting from Bitconnect trading bot and volatility software. You will receive daily profit based on your investment option. Upon investment term completion, you will receive your CAPITAL BACK to take out from the Bitconnect lending platform or optionally reinvest back in lending platform to continue receiving daily profit.}}
Line 53: Line 53:
The aim of Bitconnect.com was to become a Decentralized and Autonomous way for individuals to earn cryptocurrency. As the administrators detailed "Bitconnect is not a company" However several entities arose using the name Bitconnect designating well-known promoters as principals. It is unknown if any money or contract were ever distributed through these entities.
The aim of Bitconnect.com was to become a Decentralized and Autonomous way for individuals to earn cryptocurrency. As the administrators detailed "Bitconnect is not a company" However several entities arose using the name Bitconnect designating well-known promoters as principals. It is unknown if any money or contract were ever distributed through these entities.


November 7, 2017, the government of the [[United Kingdom]] issued Bitconnect a notice with two months to prove its legitimacy.<ref name="finder" /><ref>https://beta.companieshouse.gov.uk/company/10278342/filing-history</ref>
November 7, 2017, the government of the [[United Kingdom]] issued Bitconnect a notice with two months to prove its legitimacy.<ref name="finder" /><ref>{{cite web|url=https://beta.companieshouse.gov.uk/company/10278342/filing-history|title=BITCONNECT LTD - Filing history (free information from Companies House)|website=beta.companieshouse.gov.uk}}</ref>


On January 3, 2018, [[Texas State Securities Board]] issued a cease and desist to the company, calling it a Ponzi scheme, and citing failings in user earnings transparency, and misleading statements.<ref name="finder" /> Texas State Security Board and North Carolina Secretary of State Securities Division warned that Bitconnect was not registered to sell securities in their respective states.<ref name="finder" />
On January 3, 2018, [[Texas State Securities Board]] issued a cease and desist to the company, calling it a Ponzi scheme, and citing failings in user earnings transparency, and misleading statements.<ref name="finder" /> Texas State Security Board and North Carolina Secretary of State Securities Division warned that Bitconnect was not registered to sell securities in their respective states.<ref name="finder" />

Revision as of 18:25, 18 March 2019

Bitconnect Coin
Bitconnect logo
Denominations
CodeBCC
Development
Initial releaseFebruary 15, 2016[1]
Development statusdead
Written inC++
Operating systemWindows, OS X, Linux, Android
Source modelOpen source
LicenseMIT License
Ledger
Timestamping schemeProof of Stake
Block reward0.42% every 15 days; 10% inflation per year
Block time60 seconds
Block explorerchainz.cryptoid.info
Valuation
Exchange rate$0.40
Website
Websitehttps://bitconnectcoin.info

Bitconnect (also spelled BitConnect and stylized bitconnect, ticker BCC) is an open-source cryptocurrency which was connected with the high-yield investment program bitconnect.co.[2][3] After the platform administrators closed the earning platform on January 16 2018 and distributed users funds in BCC, confidence was lost and the value of the coin plummeted to below $1 from a previous high of nearly $500. The coin value collapse is one of the largest in the history of cryptocurrency.

The Bitconnect lending platform was closed on January 16, 2018. Loan values were distributed to the users in BCC coin. As a direct result of the information of the closing of the lending platform traders sent the price crashing down and liquidity all but disappeared.

History

Bitconnect was released in 2016 with the goal of allowing users to lend the value of Bitconnect coin in return for interest payments. The marquis program was the so-called lending platform where users traded Bitcoin for Bitconnect Coin and could lock in the instantaneous value of the coin for a set period of time while earning interest calculated daily. The interest payouts were determined by a so-called "trading bot". The trading bot was the most controversial piece of the Bitconnect.co system. However, as users have pointed out the payouts were actually calculated as a fraction of the open and close price of Bitcoin with a cap in maximum interest. The liquidity of the BCC cryptocurrency funded users ability to exchange their earnings for Bitcoin.

The following is an excerpt from the details and instructions of the Bitconnect Lending platform: [4]

Bitconnect lending: You can invest BitConnect coin in Bitconnect lending platform exclusively from the BitConnect Dashboard. This investment option involves profiting from Bitconnect trading bot and volatility software. You will receive daily profit based on your investment option. Upon investment term completion, you will receive your CAPITAL BACK to take out from the Bitconnect lending platform or optionally reinvest back in lending platform to continue receiving daily profit.

The aim of Bitconnect.com was to become a Decentralized and Autonomous way for individuals to earn cryptocurrency. As the administrators detailed "Bitconnect is not a company" However several entities arose using the name Bitconnect designating well-known promoters as principals. It is unknown if any money or contract were ever distributed through these entities.

November 7, 2017, the government of the United Kingdom issued Bitconnect a notice with two months to prove its legitimacy.[1][5]

On January 3, 2018, Texas State Securities Board issued a cease and desist to the company, calling it a Ponzi scheme, and citing failings in user earnings transparency, and misleading statements.[1] Texas State Security Board and North Carolina Secretary of State Securities Division warned that Bitconnect was not registered to sell securities in their respective states.[1]

January 17, 2018, Bitconnect shut down,[3][1] and BCC prices crashed by 92% immediately after.[6] Bitconnect announced it would refund its loans.[7] However, the Bitconnect X website remained open and operational, having just begun its ICO and allowing users to purchase BCCX coins with their BCC coins.[8]

On January 31, 2018, a temporary restraining order froze Bitconnect's assets, expiring on February 13th.[9] An alleged India region leader (one level below founder) of Bitconnect, Divyesh Darji, was arrested in Delhi, India in August 18, 2018.[10]

However Bitconnect as an entity never actually existed so it is unknown what assets Bitconnect has (or ever had). An alleged India region leader (one level below founder) of Bitconnect, Divyesh Darji, was arrested in Delhi, India in August 18, 2018.[10] It is suspected that Mr. Darji is connected to well known criminal entities involved in laundering so-called "Black Money" after the Indian government demonetization of the rupee.

Criticism and collapse

Bitconnect was suspected of being a Ponzi scheme[11] because of its multilevel marketing structure and impossibly high payouts (1% daily compounded interest).[6][7][12] However as users understood specific percentage of interest payouts were never a guarantee. Bitconnect interest fluctuated greatly with the volatility of Bitcoin, which its value was tied to.

The Bitconnect Coin was among the world’s top 20 most successful cryptocurrency tokens[13] until its price collapsed after traders began losing confidence. BCC rose from a post ICO price of $0.17 to an all-time high of US $463 in December 2017, it declined to US $0.40 as of March 11, 2019. Bitconnect released outstanding loans at a rate of US $363.62 to the Bitconnect Wallet in form of BCC. However, soon after that news the internal exchange price and liquidity collapsed resulting in a nearly complete loss of value.[7][14][15]

On January 16, 2018, Bitconnect announced it would shut down its cryptocurrency exchange and lending operation after regulators from Texas and North Carolina issued a cease and desist order against it.[16][17][18][19] On January 31, 2018, the U.S. District Court, Western District of Kentucky, granted a temporary restraining order freezing Bitconnect's assets and "to disclose cryptocurrency wallet and trading account addresses, as well as the identities of anyone to whom Bitconnect has sent digital currencies within the last 90 days."[9]

Internet meme

On October 28, 2017, BitConnect held its first (and only) annual ceremony in Pattaya, Thailand. During the event, an investor named Carlos Matos from New York gave an enthusiastic presentation and testimonial about the website which led to him becoming an internet meme.[20]

See also

References

  1. ^ a b c d e "What is BitConnect (BCC) and how does it work?". Finder.com. 2 January 2018. Archived from the original on 25 January 2018. Retrieved 30 January 2018. {{cite web}}: Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
  2. ^ Mix (2018-01-17). "How BitConnect pulled the biggest exit scheme in cryptocurrency". The Next Web. Archived from the original on 2018-01-31. Retrieved 2018-01-30. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  3. ^ a b Wieczner, Jen (January 17, 2018). "Bitcoin Crashes to Below $10,000 as Cryptocurrency Scams Scare Investors". Fortune. Archived from the original on January 27, 2018. Retrieved February 10, 2018. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  4. ^ "Investing in BitConnect Lending - Bitconnect". bitconnect.co. Archived from the original on 19 November 2017.
  5. ^ "BITCONNECT LTD - Filing history (free information from Companies House)". beta.companieshouse.gov.uk.
  6. ^ a b Williams, Sean. "BitConnect, Alleged Crypto Ponzi Scheme, Shutters Its Lending and Exchange Services and Plunges 92%". The Motley Fool. Archived from the original on 2018-01-18. Retrieved 2018-01-18. {{cite news}}: Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
  7. ^ a b c Tepper, Fitz. "Bitconnect, which has been accused of running a Ponzi scheme, shuts down". TechCrunch. Archived from the original on 2018-01-18. Retrieved 2018-01-18. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  8. ^ Sedgwick, Kai (20 Jan 2018). "Not Content Scamming $1.5 Billion, Bitconnect Wants Another $500 Million for ICO". Bitcoin. Retrieved 9 October 2018.
  9. ^ a b De, Nikhilesh (2018-01-31). "US Court Freezes BitConnect Assets as Lawsuits Mount". CoinDesk. Archived from the original on 9 February 2018. Retrieved 8 February 2018. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  10. ^ a b Osborne, Charlie. "Alleged head of BitConnect cryptocurrency scam arrested in Dubai - ZDNet". Retrieved 27 October 2018.
  11. ^ Popper, Nathaniel; Bowles, Nellie (2018). "Bitcoin Falls Below $10,000 as Virtual Currency Bubble Deflates". The New York Times. ISSN 0362-4331. Archived from the original on 2018-01-18. Retrieved 2018-01-18. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  12. ^ Cheng, Evelyn (2018-01-17). "Digital currency plunge may be healthy for cryptocurrency market". CNBC. Archived from the original on 2018-01-18. Retrieved 2018-01-18. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  13. ^ Williams, Sean (2017-07-20). "The 20 Largest Cryptocurrencies by Market Cap". The Motley Fool. Retrieved 2018-06-22.
  14. ^ "Changes coming for the Bitconnect system - Halt of lending and exchange platform". BitConnect. 2018-01-16. Archived from the original on 2018-01-18. {{cite web}}: Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
  15. ^ Bhargav, Sushant (2018-01-16). "Bitconnect Shut Down it's Lending Platform Officially for Good". TechScoop.in. Archived from the original on 2018-01-18. Retrieved 2018-01-18. {{cite news}}: Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
  16. ^ McKay, Tom (2018-01-17). "BitConnect, Anonymously-Run Crypto Exchange, Crashes After States Issue Cease and Desists". Gizmodo. Archived from the original on 2018-01-17. Retrieved 2018-01-17. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  17. ^ Kharif, Olga (2018-01-16). "BitConnect Closes Exchange as States Warn of Unregulated Sales". Bloomberg. Archived from the original on 2018-01-17. Retrieved 2018-01-17. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  18. ^ Swearingen, Jake (2018-01-17). "The Rise and Fall of BitConnect, the Sketchiest Crypto Exchange". Select All. New York Magazine. Archived from the original on 2018-01-17. Retrieved 2018-01-17. {{cite news}}: Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
  19. ^ "Crypto News Update". NASDAQ.com. 2018-01-17. Archived from the original on 2018-01-17. Retrieved 2018-01-18. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  20. ^ Paez, Danny. "'Bitconnect Carlos' Meme Is Everything Wrong With Cryptocurrency Hype". Inverse. Retrieved 2019-01-16.
Retrieved from "https://en.wikipedia.org/w/index.php?title=Bitconnect&oldid=888372988"