Bitconnect appears to be shutting down. The crypto industry’s most notorious (alleged) Ponzi scheme announced today that it was ending its controversial lending and exchange platform.
The news comes as cryptocurrency prices are plummeting across the board. At the time of writing, Bitcoin (BTC) was testing $10,000, a sharp fall from its $20,000 mark in December.
The news was announced on Bitconnect.com. The company, understandably, did not admit to any wrongdoing in the announcement. They continue to insist that they’re a legitimate operation that has suffered from “bad press”.
That bad press “made community members uneasy and created a lack of confidence in the platform.”
Bitconnect also mentioned the two Cease and Desist letters it had received since the start of January – one from the Texas State Securities Board and the other from the North Carolina Secretary of State Securities Division. Bitconnect described these orders as “a hindrance for the legal continuation of the platform.”
Bitconnect also claims to have been the victim of several distributed denial of service (DDoS) attacks. These attacks have made the platform unstable and “have created more panic inside the community.”
Because of all of these factors, Bitconnect has announced the end to its lending and exchange platform. No longer will you be able to earn 1% ROI per day through sleazy lending schemes.
What Happens To Your Money
If you were gullible enough to invest money into Bitconnect, then here’s what’s happening to your money:
- Bitconnect is closing the lending operation immediately (as of January 16, 2018)
- They are immediately releasing all outstanding loans
- With the release of your entire active loan in the lending wallet, Bitconnect will transfer all your lending wallet balance to your Bitconnect wallet balance at a price of $363.62 USD (this priced was calculated based on the average BCC price between January 1 and January 15, 2018, according to data on Coinmarketcap)
- Users are free to withdraw any BCC that was used for staking in their QT wallets as well
- The BCC exchange will close in 5 days, on January 20, 2018
It’s important to note that Bitconnect Coin (BCC) will still be available on the BitconnectX exchange. So you’ll have at least one place where you can buy and sell BCC after Bitconnect shuts down its existing marketplace.
Is Bitconnect Completely Shutting Down?
Bitconnect is ending its lending and exchange platform. However, the Bitconnect Coin (BCC) will still exist. The company will continue to make the coin available to merchant websites, including providing them with API access to accept BCC on their platforms.
BitconnectX is still alive as well. BitconnectX is some type of automated trading platform that announced an ICO in early January 2018. It was this ICO, by the way, that attracted the attention of regulators in Texas and North Carolina.
Meanwhile, the main Bitconnect website will continue to operate as a wallet service for BCC. It will also offer news and education.
Was It All A Ponzi Scheme?
Bitconnect was widely accused of being a Ponzi scheme from the very beginning. The management team never revealed their identities. Aside from one mysterious conference in Thailand, the company held few public events. There was no transparency regarding any aspect of the operation, nor was there any proof that Bitconnect had a legitimate lending program.
Lets see what some people had to say about BitConnect closing down.
— Michael Novogratz (@novogratz) November 30, 2017
I've been asked what I think about BitConnect. From the surface, seems like a classic ponzi scheme. I wouldn't invest in it and wouldn't recommend anyone else to.
I follow this rule of thumb:
"If it looks like a 🦆, walks like a 🦆, and quacks like a 🦆, then it's a ponzi." 😂
— Charlie Lee [LTC] (@SatoshiLite) November 30, 2017
— Vitalik Buterin (@VitalikButerin) December 1, 2017
The fact that Bitconnect shut down as soon as prices plummeted seems to suggest that it was a Ponzi scheme. Until company documents get leaked, however, we may never know the truth behind Bitconnect.
For now, Bitconnect’s lending platform is totally gone. You have 5 days to withdraw your BCC from the exchange before it shuts down as well. At the time of writing, the price of Bitconnect was $140 USD – down from $450 at the beginning of January 2018. The only question is: will the upcoming BitconnectX be yet another shady investment scheme? Stay tuned.