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BitConnect Closes Exchange as States Warn of Unregulated Sales

(www.bloomberg.com)
389 points JumpCrisscross | 2 comments | 17 Jan 18 01:04 UTC | HN request time: 0.412s | source
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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.

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taberiand ◴[17 Jan 18 02:52 UTC] No.16165085[source]▶
The only question remaining is - how on earth is it still worth anything? Who is buying?
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1. dannyw ◴[17 Jan 18 02:54 UTC] No.16165098[source]▶
SEC seizing remaining assets (if any) and re-distributing then?
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2. JumpCrisscross ◴[17 Jan 18 02:59 UTC] No.16165117[source]▶
> SEC seizing remaining assets (if any) and re-distributing then?

That is unlikely to pay out to someone who bought after BitConnect was shut down.

Generally speaking, when a regulator resoles a Ponzi scheme they take the promoter's assets and help put it into trust. That trust has two jobs. One, to sue those who sold their BCC before the scheme unraveled [1]. And two, to distribute cash to those who lost money.

[1] http://www.newsweek.com/it-fair-sue-madoff-victims-who-made-...