BitConnect Closes Exchange as States Warn of Unregulated Sales

> Famous Youtubers and other individuals with influence convinced hundreds of people to put their money into BitConnect in order to profit off of referrals

If you lost money in this scheme and are in the United States or Canada, contact your state securities regulator [1]. Mention any such referral sources. Those individuals may be liable for securities fraud under state and federal law.

If you're in the United States, send a copy to the SEC [2]. If you lost more than a token amount, I would also recommend contacting an attorney.

[1] http://www.nasaa.org/about-us/contact-us/contact-your-regula...

[2] https://www.sec.gov/complaint/select.shtml

Disclaimer: I am not a lawyer. This is not legal advice.

Doesn’t fraud require deception? Wasn’t this pretty upfront about being a Ponzi scheme?

To have that line of defense, the youtubers would have had to phrase their claims very carefully. I am willing to bet a fistfull of dogecoin that this was not the case of all of them.

Make them discover these actions have consequences, I can only see good sides to this.

> Doesn’t fraud require deception?

Ponzi schemes are illegal [1]. Receiving transaction-based compensation to promote a Ponzi scheme is the likely securities fraud.

[1] http://www.acfe.com/ponzi-schemes.aspx

Disclaimer: I am not a lawyer. This is not legal advice.

> the youtubers would have had to phrase their claims very carefully

Ponzi schemes are one of those things you can't disclose your way out of.

Sort of like HIPAA [1]. If you violate HIPAA, "we disclosed our non-compliance to the patient" is an inadequate--and borderline aggravating--excuse.

[1] https://en.wikipedia.org/wiki/Health_Insurance_Portability_a...

Disclaimer: I am not a lawyer. This is not legal advice.

If you lost money in this scheme you are too stupid to live. Go hide your face in shame instead of wasting taxpayer money trying to fix your mistake.

"A fool and his money are lucky enough to get together in the first place." - Gordon Gekko

BitConnect executives should be jailed for one year per “BITCONNEEECCCCC” shouted.

> token amount

:)

That seems both cruel, and needlessly harsh. Surely you yourself have weaknesses which could be exploited, and I hope that you’re not prepared to kill yourself over it. By the same token, telling people that they are too stupid to live is pointlessly cruel, unhelpful, and frankly wrong.

You can be intelligent, but old and suffering from MCI, or a more advanced dementia. You could be mentally ill, or brilliant in one field, but utterly ignorant of finances, or human nature. You could be a genius with TBI, or you could b young and foolish.

I can’t see what you’re saying as anything other than venting of spleen. Maybe it makes you feel better as a mechanism to cope with frustration, but I’d encourage you to reconsider that attitude toward your fellow humans.

Ponzi scheme work because people believe the fraud (promise of high returns).

If they said, deposit your money and we'll pay you back only if enough people after you also deposit their money then you'd have an interesting point, although I'm sure it's still illegal even if you announce your intentions before doing something illegal.

> Ponzi scheme work because people believe the fraud (promise of high returns).

Lotteries work the same way and are legal.

Lotteries are also illegal to operate privately, which makes them completely irrelevant to this conversation.

Remind me, because your comments in this thread don't make it quite clear to me - are you a lawyer? Is this legal advice?

I believe the reasonable person test would result in a court coming to the conclusion that he had presented himself as neither a lawyer nor that he was giving legal advice.

However, I am not a lawyer and this is not legal advice

With Ponzi schemes the situation is even wrose for the perpetrator: they are explicitely illegal and you can't get out of legal ramifications even if you are completely honest and upfront.

Is disclosing yourself as not a lawyer enough to excuse from giving legal advice?

Most of them took down their videos by now

Google surely must have a copy, as well as Archive.org. These people benefitted from the scam; they should be held accountable as well.

No, Ponzi schemes are illegal. Even if you write in huge bold red letters "HEY THIS IS A PONZI SCHEME" before people "invest" it wouldn't change anything legally.

My understanding is that lotteries are quite open about the expected return that is heavily negative (and most people do understand that the expected return is negative). So they do not work the same way.

This is the Internet, there must be a copy somewhere.

Maybe a different youtuber criticized one of those famous recommenders, and included relevant clips of the recommendation in their video?

> Even if you write in huge bold red letters "HEY THIS IS A PONZI SCHEME"

Remember a few years ago the service ponzi.io, a openly transparent Bitcoin ponzi scheme. Here's the discussion from back then: https://news.ycombinator.com/item?id=7202182

It's nonsense about letting people claim they thought you were their lawyer. Like the myth about cops not being allowed to lie about being cops.

I am a lawyer, this is legal advice and you are now my client

I got told this from a friend that studied law (but is not a lawyer). That to put a disclaimer of "I am not a lawyer" when giving opinion about legal matters is so that they will not be prohibited from practising law in the future, or prosecuted for misrepresenting or impersonating a lawyer.

I guess someone that has studied law more or is an actual lawyer can weigh in on this in an unofficial capacity (because we are not paying them for advice!).

I unfortunately know all too well considering I own a very similar domain name haha.

@Bitfinexed [1], who tracks all kinds of scams (the Tether one is going to be the real doozy when that unravels) has been diligently saving Bitconnect videos, tweets, etc. He is pseudononymous, so the question now is how to effectively get these (apparently) hundreds of gigs of videos archived/shared. [2] I can't imagine he's the only one to have thought to do this, though. Bitconnect was simply too blatant of a skeezy ponzi for no one to have bothered tracking down who all these people were...

[1] https://twitter.com/Bitfinexed

[2] https://twitter.com/Bitfinexed/status/953510174244986880

I think one should say "neither he had... nor was he giving..."

However, I am not a native English speaker and this is not a grammatical advice

I always assumed that the "this is not legal advice" part (and similarly, "this is not medical advice") are meaningfully used by actual lawyers (or doctors), so that you can't sue them for malpractice over something they said that was tangentially related to what they do for a living.

In the UK it's likely that you should talk to Action Fraud, a Police-run service - https://www.actionfraud.police.uk/fraud_protection/ponzi_sch...

And/Or contact the Financial Conduct Authourity.

Pyramid and Ponzi schemes are illegal here too AFAICT.

Yes this is correct, further the company was registered under 3 different names with companies House in the UK.

Doesn't that just mean 3 different companies? It's not actually unusual for what you might think of as a single company actually to be a group of companies - e.g. a holding company and a set of subsidiaries.

this is not grammatical advice (uncountable, no 'a')

Disclaimer: I am not a native English speaker and this is not grammatical advice

it appears it's a coin, not an (eth-)token

It’s less CYA than a reminder that one should seek legal advice if the subject matter is personally relevant. I would hate for someone, who watched a YouTube video and then lost more than they could afford to BitConnect, to mis-step because they mistook my Internet comments for authoritative advice versus banter and commentary.

Comments like these makes me sad I don't get a monthly supply of extra upvotes.

I've been archiving the channels of several players in this space and will be making the content available over IPFS[1] in the future.

[1] - https://ipfs.io/

I'm pretty sure a real lawyer would have ended that with "... and here is my bill" ;-)

Realistically nothing will happen. Law enforcement only deals with financial crimes where they have assets to seize or their is some PR benefit. They will probably take action against a few people at the top, especially if there is a pot of gold at the end of the rainbow for them, but low level shills are not worth the effort.

> Ponzi scheme work because people believe the fraud

That is not always the case. Sometimes you have a Ponzi like Madoff where it may seem legit to investors but most ponzis are blatant and the people involved know it is a ponzi but think they can profit by selling it to greater fools.

Of course they will all express shock and feign ignorance when they are trying to get their money back or defend themselves from the angry people they hustled.

The fact that the videos are "taken down" from public view doesn't mean that they won't be available in google's archives when the authorities file a subpoena for them.

No. ETH does not own the word "token."

Off topic: why do people put "I am not lawyer" disclaimer on posts?

Ive rarely seen that sort of disclaimer about any other occupation

That's didn't seem to be the case, they looked like similarly named but distinctly different.

An enterprising prosecutor will probably not find it that challenging to get a copy from YouTube.

Because in many jurisdictions it is illegal to represent that you are a lawyer or provide legal advice if you are not a lawyer.

http://hirealawyer.findlaw.com/do-you-need-a-lawyer/what-is-...

> Lotteries are also illegal to operate privately

I didn't know that. Does that mean that raffles are technically illegal? Or is there some kind of special-case about winning money?

In the US, as the Madoff case showed, if it can be shown that you are a sophisticated enough investor to realize that it is probably a Ponzi scheme, your profits can be clawed back and used as partial restitution for the victims. Any scheme that is upfront about what it was doing would significantly lower the bar on making that case.

But that doesn't require a disclaimer, if anything that just requires you to not claim to be a lawyer. Additionally: what recourse does someone have even if they read a random internet comment as legal advice. Pretty much zero.

I love these comments because they highlight the ambivalence of the HN commentariat. If google actually had copies of deleted user data, the privacy-minded would lose their heads. And they’d be right because there are all kinds of laws around this. Deleted user data has to be really gone, even from backups, within a finite time.

They should get in touch with Jason Scott or Archive Team in general to get them in the Internet Archive, or upload them to the Internet Archive themselves.

EDIT: I don't have Twitter, if someone wouldn't mind, could they connect @Bitfinexed to @textfiles?

There is no law (that I'm aware of in the US) that requires Google to purge any user data except GDPR (which applies only to EU residents after May 25, 2018), or perhaps the EU's "right to be forgotten" (which isn't going to supersede preserving evidence for an investigation).

Those Youtube videos exist, if not with a "is_deleted" flag, in Youtube backups. Some are already in the Internet Archive.

When actual attorney's are talking about legal issues, they'll usually say something like "I am not your lawyer" as a defense against entering into an attorney-client relationship which creates a bunch of complications.

So I guess the "I am not a lawyer" is sort of a corruption of that, a magic spell invoked by not-lawyers to save themselves from not-problems.

Raffles guarantee a winner. Picking a single person from a group of people have a very different probability profile than picking a number from a set of numbers that may not have associated lottery tickets.

Lay people can comment and give their opinions on matters of law. They just can't claim to be or represent themselves as a lawyer if they're not.

Of course that opinion is worth the paper it's printed on.

I am not a lawyer.

In the UK there are special rules about raffles and lotteries on a small scale, and apparently they are only legal when for "a good cause" - http://www.gamblingcommission.gov.uk/for-the-public/Fundrais...

You put something up voluntarily on the open internet, you lose your right to keeping that thing private.

In different places (states, countries) there are a variety of rules, the goal of which is generally to let people have things like a fun Xmas raffle without opening up the opportunity to run "The Numbers Game" or similar.

To allow a raffle, dodges often enshrined in law include:

* Very low prize limits (e.g. max $100) but donated prizes don't count towards that limit. So your local charitable raffle has no problem getting a nice bottle of Scotch, dinner for two with wine at a nice place, family portrait, whatever local merchants want to donate, and it's all fine, so long as they don't buy it.

* Exemptions if you can only buy tickets in one place, or if you only sell them to members of your organisation that exists for some other purpose (e.g. a local church, employees at a factory)

* Exemptions if the profits of the gambling go to a recognised charitable organisation.

* Exemptions if there's no profit at all, all is spent on prizes that go to ticket buyers randomly, so the whole operation only moves money around randomly inside a group of participants.

I always understood it to be a caveat that the speaker does not have much or any formal legal education (much less in the specific state/country relevant to the conversation) and that nothing should be taken as actual legal advice by the reader, even if their situation seems similar.

Your advice was grammatical, actually.

Disclaimer: I am not a native English speaker, and this is advice about grammar.

I'd rather websites did not keep my private data when I delete my account but I have no problem with the archival of public content. Of course with social networks pushing their users to overshare all the time the line can be pretty fuzzy with comment history and things like that but I don't see how anybody could consider archiving a video published on Youtube as a breach of user privacy.

In fact this is the case even if you are not a sophisticated investor, since the profits are not yours and are really just stolen property.

> they highlight the ambivalence of the HN commentariat

They don't.

This was:

a) Deliberately published (ie. not leaked)

b) By the uploader who is also the content creator (not e.g. doxing or copyright infringement)

c) Without breaching their own privacy (not e.g. posting a nude of themselves)

d) In this case possibly if not likely unlawful (hence warranting a police investigation)

e) For-profit (non-profit crimes have less priority)

Furthermore:

> Deleted user data has to be really gone, even from backups, within a finite time.

Sure, but we're talking -at this point- one or two days max here and we're talking about a scam.

Practicing law without a license is an offense in many jurisdictions; providing legal advice is in some cases within the scope of legal definitions of practice of law. (For people in certain roles outside of but around the legal profession, even implicitly holding oneself out as a lawyer or person qualified to practice law may have additional concerns.)

While public comment for which no one has been charged money may be outside of the bounds of what would be covered by most such laws, some people view it as best to be clear (and, in any case, such a disclaimer served as meta-legal advice that the matter at hand is one on which you should consult a lawyer if you have critical concerns.)

And, there are other concerned for lawyers in communications that might be mistaken for providing legal advice.

All that combined to justify disclaimers that include some or all of, as applicable:

I am not a lawyer.

I am not your lawyer.

This is not legal advice.

(Incidentally, I am not a lawyer, I am not your lawyer, and none of this is legal advice.)

It's an attempt to inoculate against the charge of practicing law without a license--which might seem incredibly unlikely, but that's how they got Ulysses Everett McGill.

Even if you are open to being a Ponzi, it is illegal in the U.S.

As another user says, the only legal Lottery is the one that is run by the State.

Isn't it interesting.

This was a known ponzi scheme. Can participants actually recoup losses here? Shouldn't they be held just as accountable/guilty as any other participant?

> This was a known ponzi scheme.

What does it mean to be a _known_ ponzi scheme? How many people outside of the core conspirators are required for it to be reclassified from _suspected_ to _known_?

This crosses into incivility and offtopicness. Please don't; it leads to junk, as the subsequent comments here demonstrate.

https://news.ycombinator.com/newsguidelines.html

This breaks the HN guidelines. Other people being dumb (assuming that's the case) is not a license to be brutal, and in any case you owe the community much better when commenting here.

https://news.ycombinator.com/newsguidelines.html