After regulators based in Texas and North Carolina sent out warnings about the sketchy Bitconnect lending platform, the digital currency tumbled to less than $10 by mid January, compared to it’s $437 high in late December.
Why? Well anybody with half a brain should have red flagged Bitconnect as a ponzi scheme from the very beginning. Unfortunately, human beings and their thirst for greed (along with strong dosage of FOMO) are strong vices which can cloud any sound financial judgment.
However I do not fully place blame on personal greed or irresponsibility. I truly believe it’s been a travesty that some of the most influential YouTube content creators in the crypto sphere (such as CryptoNick, Trevon James, Craig Grant, and Aaron St. Hilaire) were actively promoting this scam. They were akin to being snake oil salesmen, making promises that were just too good to be true, for the sake of pulling in some affiliate dollars.
A Bitconnect Crash In The Making
PonziConnect Bitconnect’s inception in January 2017, many were skeptical about this platforms services. In essence, people needed to send Bitconnect Bitcoin in exchange for Bitconnect Coin (BCC) on their exchange. A red flag should have been raised right there.
Furthermore, once you had this BCC purchased via Bitcoin, you were guaranteed “up to 120 percent return per year.” Investors were told they were earning interest by holding their coin “for helping maintain the security of the network”. Such dubious claims should never be accepted without genuine proof.
Finally, add in the referral system seen in many other Ponzi schemes of the past, and the fact that the operation was run anonymously (never trust a crypto company that doesn’t have a face!), it’s hardly surprising that this whole endeavor has ended in tears for untold thousands of people.
Don’t Trust Youtube Ads!
To cap of this piece, I cannot reiterate enough not to trust anything related to cryptocurrency which came to you via a paid advertisement. Those men in front of the camera are using jealousy and envy (tours of their supposed luxury apartment, fancy swimming pool, close-up shots of a fat bitcoin wallet etc.) to suck you into affiliate schemes which are designed to make them even more money at your expense.
I mean come on. The promise of up to 40% earned interest, plus a daily bonus of up to 0.25% per day on each loan? This was the kind of Cinderella rags-to-riches that Bitconnect was peddling. The promise of risk-free high returns is typical of a financial scam. It’s like the old saying, “if it sounds too good to be true, it probably is“.
This article was originally published at CryptoGeography. Permission to reprint this article elsewhere is granted, provided that all text and hyperlinks (including this footnote) remains intact.