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    BitConnect Closes Exchange as States Warn of Unregulated Sales

    (www.bloomberg.com)
    389 points JumpCrisscross | 21 comments | 17 Jan 18 01:04 UTC | HN request time: 1.14s | source | bottom
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    ve55 ◴[17 Jan 18 01:56 UTC] No.16164829[source]▶
    For those unaware, Bitconnect was a Bitcoin-based ponzi-scheme that had operated 'successfully' for quite some time. I don't say 'ponzi' as an insult in the way some do for cryptocurrencies, it was quite literally just a bare-bones ponzi scheme, where you deposit your money (Bitcoin) on their website, buy their token, 'lock' your funds for some amount of time, and you are promised very high interest rates while encouraged to re-invest your returns.

    What has happened today is Bitconnect has closed the exchange on their website, and so users flocked to some of the only other exchanges (of dubious reputation, since no reputable exchange wanted to list the BitConnect coin) in order to sell their now-worthless tokens, resulting in losses of around 90% today: https://coinmarketcap.com/currencies/bitconnect/

    Many famous Youtubers and other individuals with influence convinced hundreds of people to put their money into BitConnect in order to profit off of referrals, leading to a lot of unfortunate losses and a lot of delusion and misinformation among devoted investors. The general sentiment towards those that lost money due to BitConnect has been a mocking attitude in the cryptocurrency investment communities, as BitConnect has been referred to by many as a blatant ponzi scheme for months.

    replies(12): >>16164865 #>>16164910 #>>16164929 #>>16165009 #>>16165080 #>>16165085 #>>16165220 #>>16166320 #>>16166678 #>>16168745 #>>16170456 #>>16174953 #
    FLUX-YOU ◴[17 Jan 18 02:15 UTC] No.16164910[source]▶
    https://www.youtube.com/results?search_query=BitConnect+refe...

    Jesus, this is pretty blatant.

    replies(1): >>16165019 #
    1. ceejayoz ◴[17 Jan 18 02:37 UTC] No.16165019[source]▶
    Several of the "get referrals!" videos literally use pyramids in their thumbnails to illustrate the program. Holy crap.
    replies(3): >>16165110 #>>16165142 #>>16166626 #
    2. idbehold ◴[17 Jan 18 02:56 UTC] No.16165110[source]▶
    The pyramid was literally on the Bitconnect FAQ page: https://youtu.be/wK0ztRcXvNQ?t=135
    replies(2): >>16165188 #>>16165830 #
    3. dmix ◴[17 Jan 18 03:07 UTC] No.16165142[source]▶
    There are plenty of large long-running "pyramid" structured marketing companies that are totally legal though. Just because it's a pyramid scheme doesn't mean it's a ponzi scheme nor automatically imply that it's exploiting people.

    Just wanted to make that distinction. Not commenting on BitConnect directly.

    replies(3): >>16165192 #>>16165690 #>>16167727 #
    4. saalweachter ◴[17 Jan 18 03:19 UTC] No.16165188[source]▶
    I mean, this being the internet, it could have started as a tongue in cheek joke and then when the money started rolling in the founders just kind of went with it.

    Which I think is a potential lesson for HN readers: something can be funny, but still be fraud.

    replies(2): >>16165409 #>>16165550 #
    5. sillysaurus3 ◴[17 Jan 18 03:19 UTC] No.16165192[source]▶
    Yep. https://www.youtube.com/watch?v=s6MwGeOm8iI
    6. spookthesunset ◴[17 Jan 18 04:13 UTC] No.16165409{3}[source]▶
    No. My USDT is on them deliberately putting that crap on the site in order to weed out anybody with a functioning brain. It's kinda like Nigerian prince scammer emails are full of deliberate grammar and spelling errors. You gotta filter out the noise in your conversion funnel.

    Lots of crypto-coin stuff, including virtually all "name brand" crypto's, do the same thing. Most of the marketing is full of complete political, financial, and computer science nonsense. Anybody educated in any of those topics takes one look at the crypto space and goes "nope. sounds too good to be true. pass". What's left is a much more, shall we say, naïve set of marks to go after. You know, the kind that won't likely sue the shit out of those at the top of the pyramid... or even report them to the authorities. A very nice feature of Bitcoin is it specifically targets those with an anti-authoritarian bent--the kind who blather on about tax-theft, how the police should be deregulated, free market private industries and how the system of law should be replaced with cold, hard, unfeeling computer programs. If you were a scammer, wouldn't you want to target a group of people who wouldn't in a million years report you to the police?

    Good stuff. The "crypto space" is an amazing thing to watch. Never a dull moment.

    replies(2): >>16166896 #>>16167442 #
    7. TheSmiddy ◴[17 Jan 18 04:49 UTC] No.16165550{3}[source]▶
    for example: https://www.chemtrailvaccines.com/

    Not really a fraud though, they WILL send you a bottle of mints as described

    replies(2): >>16165804 #>>16166748 #
    8. spookthesunset ◴[17 Jan 18 05:25 UTC] No.16165690[source]▶
    > Just wanted to make that distinction.

    Useless pedantry. A scam is a scam no matter what you call it. Getting caught up deep in terminology is a great way to for shysters to obfuscate any wrongdoing. These "business structures" are all part of the broader category called "things that are a scam".

    replies(1): >>16166644 #
    9. TaylorGood ◴[17 Jan 18 05:58 UTC] No.16165804{4}[source]▶
    That’s brilliant.
    10. ce4 ◴[17 Jan 18 06:05 UTC] No.16165830[source]▶
    Video was deleted by the user. Any other source?
    replies(1): >>16167388 #
    11. Trundle ◴[17 Jan 18 09:28 UTC] No.16166626[source]▶
    People don't get involved with pyramid schemes because they're too dumb to see that they're pyramid schemes (well some might). They do it because they delude themselves in to thinking that they're getting in near the top.
    12. TeMPOraL ◴[17 Jan 18 09:33 UTC] No.16166644{3}[source]▶
    I think GP tried to make the point that not every pyramid-shaped scam is illegal.
    replies(1): >>16166769 #
    13. lagadu ◴[17 Jan 18 09:58 UTC] No.16166748{4}[source]▶
    > 100% proven to combat all symptoms caused by government released chemtrails

    Can't argue with their claims either, the mints really do combat all the symptoms caused by government released chemtrails.

    replies(1): >>16166833 #
    14. tomclive ◴[17 Jan 18 10:02 UTC] No.16166769{4}[source]▶
    Herbalife just escaped being labelled a pyramid scheme a couple of years ago and seems to hover around the edges of legality: https://www.theguardian.com/business/2016/jul/15/herbalife-f...
    15. daemin ◴[17 Jan 18 10:19 UTC] No.16166833{5}[source]▶
    I didn't know chemtrails caused bad breath!

    /sarcasm

    replies(1): >>16167583 #
    16. asddddd ◴[17 Jan 18 10:39 UTC] No.16166896{4}[source]▶
    I disagree, lots of smart people who know it's bullshit are still involved (because it's very easy money if you know what you're doing). Any sort of tangible value is utterly irrelevant, what matters is future market opinion. Quite the same for gold, stocks, forex, or anything else, just with much greater volatility.

    > If you were a scammer, wouldn't you want to target a group of people who wouldn't in a million years report you to the police?

    Most of the fresh faces that make the bubbles happen don't care about any of that stuff, they are just blinded by greed and will get burned for it. The ancap/libertarian ideologues who have been involved for years are the ones who are worth ridiculous amounts of money these days.

    The fact that it's a relatively large community of fresh millionaires/billionaires (they won't tell you, but that's a huge percent of people involved in crypto for 5+ years) with an unwillingness to convert to fiat currencies (revoking citizenships to avoid taxes, even) does mean that there's a willingness to put money in marginal opportunities.

    17. rplnt ◴[17 Jan 18 12:38 UTC] No.16167388{3}[source]▶
    Not sure, but this is what I've found:

    https://bitconnect.com/images/referal_bonus.png

    replies(1): >>16167780 #
    18. trophycase ◴[17 Jan 18 12:47 UTC] No.16167442{4}[source]▶
    Email scammers lose time if they don't quickly eliminate bad targets. Ponzi schemes have no such issues.
    19. jacobush ◴[17 Jan 18 13:14 UTC] No.16167583{6}[source]▶
    it combats that too
    20. saas_co_de ◴[17 Jan 18 13:35 UTC] No.16167727[source]▶
    Multi-level marketing is perfectly legal if you are selling a real product. If you are selling stock in your business that doesn't actually produce anything except for marketing materials to sell stock then not so much.
    21. npongratz ◴[17 Jan 18 13:43 UTC] No.16167780{4}[source]▶
    Image also archived here: http://archive.is/wdET3