Controversial ‘BitConnect’ Shuts Down Lending Program, Exchange Platform
- Since the announcement of the shutdown, BitConnect tokens have tumbled from around $360 to $20.
Citing negative press and recent legal troubles, anonymously-run cryptocurrency firm BitConnect has announced the shutdown of its lending program and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. Read this Term platform. Users with active loans on the platform have been promised a payback of $363.42 for each of the BitConnect tokens (BCC) that were locked into a loan. The payback per BCC token was calculated from the price of an average BCC coin over the last 15 days.
BitConnect coins aren’t completely disappearing (only BitConnect’s internal lending program and exchange platforms are going.) However, BCC tokens have taken a hit in their valuation to the tune of roughly 90%, falling from roughly $360 to around $20.
Perhaps trying to spin the situation in a more positive light, BitConnect said in a statement that the shutdown of the lending platform will ‘allow BitConnect to be listed on outside exchange giving more options for trading.’ BitConnect also says that its BitConnect X ICO will continue, and that plans to build an exchange platform on the BitConnect X website are underway.
Shutdown Comes After Regulatory Hits, ‘Bad Press’
The shutdown comes in the wake of Texas Securities Commissioner Travis J Iles’s decision to serve BitConnect with a cease and desist order on January 4, 2018. Since BitConnect is legally based in the UK, the order did nothing except to stop the company from dealing directly with Texan residents.
Soon after the Texan regulatory hit, BitConnect received another cease and desist order from the North Carolina Secretary of State Securities Division.
BitConnect cited both of these orders as part of the reason behind the decision to shut down, saying that ‘these actions have become a hindrance for the legal continuation of the platform’
In addition to these regulatory hits, BitConnect also cited DDoS attacks from ‘outside sources’ and the fact that ‘continuous bad press’ had contributed to a sense of unease, creating a ‘lack of confidence’ in community members.
BitConnect has been suspected to be a scam by members of the crypto community for some time--even Vitalik Buterin, who retweeted a statement by Mike Novogratz condemning the platform.
Anyone who doesn't yet agree with this should watch this video:https://t.co/mA2NxKlSQN https://t.co/k2YJvWMnzE
— Vitalik Buterin (@VitalikButerin) December 1, 2017
BitConnect's platform had all the trappings of a typical Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities. A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities. Read this Term--in addition to an affiliate program, customers who chose to participate in the BitConnect lending program were promised outrageously high returns. Those who could lend their cryptocurrency to the platform’s trading bots for longer periods of time were promised correspondingly higher amounts of profits.
It’s clear that as cryptocurrency enters further into the world of financial technology, governments and financial institutions are increasingly cracking down on crypto-related practices. While some scams are becoming very sophisticated, shady dealings in the world of crypto are also becoming increasingly hard to get away with.
Citing negative press and recent legal troubles, anonymously-run cryptocurrency firm BitConnect has announced the shutdown of its lending program and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. Read this Term platform. Users with active loans on the platform have been promised a payback of $363.42 for each of the BitConnect tokens (BCC) that were locked into a loan. The payback per BCC token was calculated from the price of an average BCC coin over the last 15 days.
BitConnect coins aren’t completely disappearing (only BitConnect’s internal lending program and exchange platforms are going.) However, BCC tokens have taken a hit in their valuation to the tune of roughly 90%, falling from roughly $360 to around $20.
Perhaps trying to spin the situation in a more positive light, BitConnect said in a statement that the shutdown of the lending platform will ‘allow BitConnect to be listed on outside exchange giving more options for trading.’ BitConnect also says that its BitConnect X ICO will continue, and that plans to build an exchange platform on the BitConnect X website are underway.
Shutdown Comes After Regulatory Hits, ‘Bad Press’
The shutdown comes in the wake of Texas Securities Commissioner Travis J Iles’s decision to serve BitConnect with a cease and desist order on January 4, 2018. Since BitConnect is legally based in the UK, the order did nothing except to stop the company from dealing directly with Texan residents.
Soon after the Texan regulatory hit, BitConnect received another cease and desist order from the North Carolina Secretary of State Securities Division.
BitConnect cited both of these orders as part of the reason behind the decision to shut down, saying that ‘these actions have become a hindrance for the legal continuation of the platform’
In addition to these regulatory hits, BitConnect also cited DDoS attacks from ‘outside sources’ and the fact that ‘continuous bad press’ had contributed to a sense of unease, creating a ‘lack of confidence’ in community members.
BitConnect has been suspected to be a scam by members of the crypto community for some time--even Vitalik Buterin, who retweeted a statement by Mike Novogratz condemning the platform.
Anyone who doesn't yet agree with this should watch this video:https://t.co/mA2NxKlSQN https://t.co/k2YJvWMnzE
— Vitalik Buterin (@VitalikButerin) December 1, 2017
BitConnect's platform had all the trappings of a typical Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities. A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities. Read this Term--in addition to an affiliate program, customers who chose to participate in the BitConnect lending program were promised outrageously high returns. Those who could lend their cryptocurrency to the platform’s trading bots for longer periods of time were promised correspondingly higher amounts of profits.
It’s clear that as cryptocurrency enters further into the world of financial technology, governments and financial institutions are increasingly cracking down on crypto-related practices. While some scams are becoming very sophisticated, shady dealings in the world of crypto are also becoming increasingly hard to get away with.