- The BitConnect Ponzi scheme was shuttered one year ago today
- Thousands of investors lost hundreds of millions of dollars when the platform collapsed in 2018
- BitConnect was promoted as a lending platform but relied on new deposits to finance withdrawals
BitConnect, the crypto scheme that promised holders regular returns on their investment, closed its doors one year ago today, bringing an end to one of the more unpleasant chapters in cryptocurrency’s short history. While many in the crypto community are celebrating the anniversary of its demise, the shockwaves are still being felt by those who plowed savings and borrowed money into BitConnect, only to see it vanish into dust overnight. Some of the high-profile promoters are still awaiting trial in response to class action lawsuits filed against them by former investors, meaning that the name BitConnect will not be completely consigned to the history books just yet.
BitConnect launched in 2016 and marketed itself as a fund where investments were guaranteed to bring monthly profits. The price of the token rose from under a dollar to $50 by June as more and more people signed up for the platform, aided by promoters such as Craig Grant, Trevon James, Ryan Hildreth, and CryptoNick, who pushed the platform for all it was worth on social media, making millions from referrals in the process.
The Pyramid Collapses
By Autumn 2017 the platform was really taking off, but at the same time questions were being raised about the mechanism by which the interest was being earned, and accusations of it being a pyramid scheme began to take hold. With pressure mounting, two cease and desist orders proved too much for the company, and news broke overnight on January 16, 2018, that BitConnect had been shattered. Those hoping to cash out their tokens found that withdrawals were frozen and were only able to watch on in horror as the value dropped by 87% within hours. Amazingly, the company still tried to go ahead with thier BitConnectX ICO, but this was swiftly pulled and the brand died a death, leaving existing investors practically penniless.
An Eternal Warning
BitConnect’s army of paid shills, who thought they had got away with their money, have been collectively sued and are awaiting a court date, whilst those who put their trust, and in some cases their life savings, into BitConnect are presumably still trying to piece their lives back together. For them, this isn’t a happy anniversary, more a reminder of a dream that was swiftly and brutally killed off.
The name ‘BitConnect’ has become synonymous with scams and the ‘Wild West’ side of crypto, and probably will do for some time to come. In that case, it serves as a useful reminder that every potential investment should be thoroughly researched and questioned before you put a cent into it. For now though, we can ‘enjoy’ a moment that will forever be associated with BitConnect, and perhaps the peak of the 2017/18 silly season: