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BitConnect Closes Exchange as States Warn of Unregulated Sales

(www.bloomberg.com)
389 points JumpCrisscross | 8 comments | 17 Jan 18 01:04 UTC | HN request time: 0s | 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.

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JumpCrisscross ◴[17 Jan 18 02:03 UTC] No.16164865[source]▶
> 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.

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closeparen ◴[17 Jan 18 02:36 UTC] No.16165014[source]▶
Doesn’t fraud require deception? Wasn’t this pretty upfront about being a Ponzi scheme?
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Iv ◴[17 Jan 18 02:46 UTC] No.16165061[source]▶
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.

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JumpCrisscross ◴[17 Jan 18 03:28 UTC] No.16165228[source]▶
> 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.

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1. paulie_a ◴[17 Jan 18 14:03 UTC] No.16167918[source]▶
Off topic: why do people put "I am not lawyer" disclaimer on posts?

Ive rarely seen that sort of disclaimer about any other occupation

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2. ncallaway ◴[17 Jan 18 14:17 UTC] No.16168024[source]▶
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-...

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3. paulie_a ◴[17 Jan 18 14:35 UTC] No.16168145[source]▶
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.
4. 52804375092485 ◴[17 Jan 18 14:51 UTC] No.16168281[source]▶
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.

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5. nkrisc ◴[17 Jan 18 15:06 UTC] No.16168437[source]▶
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.

6. Crespyl ◴[17 Jan 18 16:16 UTC] No.16169074[source]▶
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.
7. dragonwriter ◴[17 Jan 18 19:59 UTC] No.16171225[source]▶
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.)

8. snowwrestler ◴[17 Jan 18 21:12 UTC] No.16171874[source]▶
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.