{"id":25623,"date":"2018-01-17T17:53:15","date_gmt":"2018-01-18T01:53:15","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=25623"},"modified":"2018-10-09T19:59:09","modified_gmt":"2018-10-10T02:59:09","slug":"taller-stand-harder-fall-collapse-bitconnect","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/taller-stand-harder-fall-collapse-bitconnect\/","title":{"rendered":"The Taller They Stand, The Harder They Fall: The Collapse of BitConnect"},"content":{"rendered":"

It was common knowledge, to anyone having spent over 10 minutes conducting due diligence on BitConnect<\/a>, that the platform was a textbook Ponzi scheme. The website makes bold claims as to how it can \u2018guarantee\u2019 returns, thanks to what it calls \u2018volatility software<\/a>\u2019, as well as a Bitcoin trading bot. The legitimacy of these claims remains questionable, at best \u2013 there is no proof of anything going on behind the scenes.<\/p>\n

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BitConnect<\/a> billed itself as a “An open source, peer-to-peer, community driven decentralized cryptocurrency.” Most people thought of it as simply a ponzi scheme.<\/figcaption><\/figure>\n

Many speculated that the returns investors received were a mix of both the profits accrued from Bitcoin\u2019s bullish price increase (to trade on the platform, users were required to purchase the native BCC token for Bitcoin), and the deposits from newer investors (locked up<\/a> for close to a year).<\/p>\n

In classic HYIP style, this business model worked so long as more users were onboarded, which explains the focus on referrals<\/a> that incentivised attracting friends, family, and followers to the platform.<\/p>\n

Dramatic Unravelling – Down 94% In 24 Hours<\/strong><\/h2>\n

The writing was on the wall for BitConnect<\/a> for some time now \u2013 the site had been subjected to DDoS attacks in the past few days, and received yet another<\/a> cease-and-desist letter, whereby the platform was accused of dealing in unregistered securities (this marks the second this month, the first being from the state of Texas).<\/p>\n

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1\/2 Our counterparts at the Texas State Securities Board have ordered BitConnect, a $4B cryptocurrency promoter, to halt its fraudulent sales. https:\/\/t.co\/y5No9YDdca<\/a><\/p>\n

— SEC Fort Worth (@FortWorth_SEC) January 5, 2018<\/a><\/p><\/blockquote>\n