In what is believed to easily be the largest MLM cryptocurrency Ponzi collapse, earlier today BitConnect announced they were terminating ROI payments.

In a news post dated January 16th, BitConnet advised affiliates it was “halting” it’s lending and exchange platform.

For those unfamiliar with the company, BitConnect was the
first MLM ICO lending Ponzi scheme
.

BitConnect affiliates acquired BCC points from anonymous admins (or other affiliates), and then parked the points with the company on the promise of a daily ROI.

The “exchange platform” was an internal exchange BitConnect affiliates were able to cash out through, typically by selling their points to other BitConnect affiliates.

Rather than acknowledge they’d run out of money to pay affiliate ROIs with, BitConnect instead blamed “bad press”, the US government and DDOS attacks for its collapse.

The continuous bad press has made community members uneasy and created a lack of confidence in the platform.

We have received two Cease and Desist letters, one from the Texas State Securities Board, and one from the North Carolina Secretary of State Securities Division.

These actions have become a hindrance for the legal continuation of the platform.

Outside forces have performed DDos attacks on platform several times and have made it clear that these will continue.

These interruptions in service have made the platform unstable and have created more panic inside the community.

The reality is that had BitConnect of actually been deriving profits from a trading bot, as the anonymous owners claimed, points one and two would be a non-issue.

With respect to DDOS attacks, surely a company generating points with a market cap of $2.66 billion ten days could afford enterprise-level DDOS protection?

In the wake of BitConnect’s collapse, public trading of BCC points has plummeted to $30 to $40.

BCC points were always worthless but given they can’t be parked for a Ponzi ROI, the trading value between BitConnect investors is now expected to approach $0.

Ten days ago BCC was trading at $431 dollars. Today an adjusted market cap of just $224 million equates to $2.4 billion dollars wiped.

What this translates into as far as investor losses goes is unknown. Only BitConnect’s anonymous admins truly know how much money they received in exchange for BCC points.

If I had to guess, I’d estimate BitConnect investor losses to run between $500 million and $1.5 billion. $2 billion at a stretch but I’d be surprised.

Sadly going by public discussion of the collapse by BitConnect affiliates, a number of them appear to have been caught off-guard.

For those not just blindly investing however, there were plenty of warning signs leading up to BitConnect’s collapse.

Texas issued BitConnect with a cease and desist
on January 5th

North Carolina issued BitConnect with a cease and desist
on January 10th

BitConnect’s top US investor Glenn Arcaro
pulled a runner
less than a week ago

Shortly after Arcaro disappeare

🤖 Quick Answer

What was BitConnect and how did it operate?
BitConnect was a cryptocurrency lending platform that operated as a Ponzi scheme disguised as a multi-level marketing (MLM) venture. Affiliates purchased BCC tokens and deposited them to receive promised daily returns of interest (ROI), while an internal exchange allowed participants to cash out by selling tokens to other affiliates.

Why did BitConnect collapse in January 2018?
BitConnect announced the termination of ROI payments and halting of its lending and exchange platform on January 16th, 2018. The collapse resulted in approximately $2.4 billion in losses within ten days, representing the largest MLM cryptocurrency Ponzi scheme failure at that time.

How did BitConnect deceive its investors?
Rather than disclosing insolvency, BitConnect concealed its inability to sustain promised returns by blaming external factors. The scheme relied on

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