The trouble with bitconnect is that it is awesome...... while it pays out. When it crashes it is big enough to do serious damage to the entire world of crypto.
Regarding being investigated, this wont happen yet as no one will complain as everyone is still being paid and its based in Asia (Vietnam I believe) and so its very difficult for western agencies to investigate, even if they feel it has jurisdiction.
The whole thing is more complex than a classic Ponzi, where original investors are paid out with new investors money. In bitconnect you invest bitcoin, convert it to BCC token, yet invest in US dollar amounts and are paid out in US Dollar amounts. You have to trade out via BCC token. This is a completely pointless and unnecessary step. Unless of course, you want to completely control the market!
BCC token had a large pre mine, so the operators control most of the supply side of BCC token, as well as controlling the interest rate their 'bot' pays out etc.
I agree this is a scam, however, I think it has a lot longer left to run. When it collapses it will do immense damage to the world of crypto (prob similar to the Mt Gox failure). When this happens I expect the law to come looking for those at the top of the pyramid!
Its not the first time:
Unfortunately, schemes like this are very appealing for non-technological people, who are mainly into BTC for a profit.
They don't have the technological knowledge to start a mining ridge,. Nor can they determine if a certain ICO is legitimate or not.
And jus holding BTC in a wallet isn't exciting for them. Because they hear about the great profits that everyone has made.
So then they and up with a scam like this.
Agreed. The funny thing is that if you had bought and held btc you would have out performed the bit connect trading bot. Bcc token would have eclipsed even this though, but just look at what happened when their website went offline for a few days during the ‘hack’.
I agree with everything you have said. It could really damage the crypto sector for sure.
They have cleverly disguised what is going on with this shell game involving the BCC token which as you said complicates matters when it comes to investigation of what is going on. Even if they see that it looks fishy they probably won't have probable cause to investigate to see if the "bot" exists.
In regards to the Bitcoin Savings and Trust Ponzi it will be interesting because that guy created the system and got sent to Club FED but I'm just wondering if any reprecusions will really happen to Trevon and Craig because they can just claim that they didn't create it , know the operators, or really know what was going on. They just knew that they were getting paid and that they could get a good affiliate commission by promoting it. It is a plausible excuse. Then if it gets pointed out that Craig acknowledged the bot was just a story he will say that he didn't really know one way or another if it was real or otherwise but just wanted to stick to what was real like the fact that the BCC coin existed and that the website was there and people could visit it.
I don't think anything will end up happening to Craig or Trevon in my opinion but they might have some sleepless nights if they aren't already.
I agree, but I can see investigations into individuals promoting this. There is obviously something wrong with anything offering 1% daily interest in perpetuity. It has been regularly pointed out on here and in other places (including in promotors threads) that its a scam. Most of them have acknowledged to some degree that at the very least, something does not add up.
There is so much money going through these individuals that if the law doesn't take an interest, someone who lost thousands will. These guys don't exactly hide themselves and don't seem to be sharpest tools in the box. I think one of them was bragging about making 700k from BC, so that means people have invested a hell of a lot of money through them and if BC goes down, there will be many, many pissed off individuals who cannot vent on BC directly as they are anonymous and overseas. I would not like to be one of these guys if/ when it tanks.
I agree. At the very least their YouTube channels could be torn apart by trolls who lost money in the system.
Another scenario is that a young new recruit at the IRS who has little man syndrome could be trying to learn about Bitcoin by watching YouTube videos and could see Craig in the slip stream adds showing off his Bitcoin Stash and ball'n out of control in these resorts and decide to make a name for himself and earn his keep and launch an investigation against Craig and Trevon which would be an a living hell.
I just would somewhat respect these guys a little more if they just told everyone in every video that they don't know what is going on behind the scenes and this is an extremely risky investment and that it is more like gambling at the casino or a lottery ticket.
Agreed. But they are selling a lifestyle not an investment. They are saying 'do what I say and you can be like me'. They are like the evangelical TV preachers who say give me your money.
They don't need to be prosecuted for their lives to become very difficult. I Craig saying that he was declaring the income for tax purposes but offsetting all his hotel stays etc as an allowable expense! No idea if anything he says is actually true but an investigation into that alone would be a nightmare!
Yeah that is true. They are selling the lifestyle for sure and while that has lost them favor in the Steemit community and with other people who maybe entertained these guys for a minute it isn't anything that would get them in trouble I don't believe.
Honestly I would say that if he is expensing the hotel stays as a business expense I would say that is perfectly fine because he is blogging and is bringing in revenue from YouTube, Steemit, and affiliate commissions from Genesis mining and from Shitconnect.
If there was a tax investigation it would be a nightmare because certain stuff might have to be calculated as earnings and then other stuff would have to be calculated as capital gains when he spends it or goes to cash in his bank account. It would be very hairy for sure.
I think it still boils down to what his involvement was and since they didn't create the site or do the ICO of BCC or any of that they can plead ignorance and even if an investigator is like "Come on ....... you knew" It just wouldn't be enough I don't believe.
Honestly I don't wish for those guys to get nailed. I would rather them just tell everyone that they don't know what is going on but that it has been paying out but could be gone tomorrow.
The great thing about STEEM is that it can't be gone tomorrow. Even if Steemit went completely down we would still have Busy.org, Dtube.video, ChainBB, Steepshot, and Zappl
If Bitconnect.co goes down well then it is gone because those aren't blockchain contracts. It is some sort of database driven website keeping track of all of that and the only way in.
I don't have ill wishes towards these guys either but I seriously doubt that they will see the next few years out without some kind of investigation. You cant brag about making nearly a million dollars without popping up on someones radar. And regarding the expense thing, if 99% of your business and profit is in promoting a 'trading bot' and cloud mining, there is no way that $10k+ hotel expenses per month for you and your family to live it up in Florida is a reasonable expense. Expenses usually need to be for the sole benefit of the business and you would struggle to justify that!
My bigger concern is that this is so large now, that when it collapses, the general public will assume its blockchain/ bitcoin to blame and it could set back adoption by years. Even today I speak to people who knowingly point to the fact that bitcoin is not safe as it was hacked several years ago, referring to the Mt Gox collapse! If/ when BCC goes down, the general public will turn away from any kind of crypto adoption as it has been proved to be a Ponzi and prices will plummet across the board. I think that the crypto space is big enough to withstand that but it will be a massive set back.
I agree 100%. For a long time on the news and stuff they would say crap like "All the Bitcoins got hacked" referring to Mt. Gox like you said. It is annoying and I agree that it could be a huge set back.
In a weird way Shitconnect is probably a lot of people's first introduction to digital currencies. Hopefully when it all goes down they don't leave for good.
@brianphobos
Trev in one of his recent vids said that the bot does not exist
I am certain that they will soon end up like Garza and his paycoin scam :-)
Vietnam you say?
Vietnam’s Central Bank Seeks to Ban Bitcoin Activities..
https://news.bitcoin.com/vietnams-central-bank-seeks-ban-bitcoin-activities/
I remember seeing it somewhere but cant find the article now. I have only had a quick look but a more detailed look should bring it up.
BCC is set up as a Ltd company in the UK according to what I've seen at an office complex where you can rent space by the day or whatever and people there have not seen anyone from BCC for a while https://beta.companieshouse.gov.uk/search?q=bitconnect I think the people involved happen to be Vietnamese or Vietnamese in origin. That office is in Essex on the NE side of London
I am not sure. I read somewhere it was based in Vietnam but it could have a uk office or subsidiary. It’s pretty easy to set up a uk business and often used to give a feeling of legitimacy! As you said, those offices rent by the day,so easy to fold when you are done.
You know Money is also like a Ponzi scheme...
Because it is one
the problem with bitconnect and other lending coins they admit that its a ponzi scheme people that are promoting it knows its a ponzi and are riding the wave until it falls flat and its going to hurt the community when it happens which may happen next year or in 5 years
I wrote a piece about Bitconnect (shitconnect) as well. It really is a problem. It started out as a little malignant cell in the crypto space that is rapidly growing into a giant tumor and eventually a gargantuan cancer that will impact every crypto .
It's already showing signs of faltering. Just look at the average pay out in interest over the last month (0.82) and last 6 months (0.95). It's decreasing for a reason even though Bitcoin has risen and even BCC has risen. I leave out the weekly as it's not consistent enough, but if you look at one 7 day it will be (0.62) and the next (1.10) albeit on a downward trend overall. That is the real indicator. When bitcoin's price dwindles or something happens within the space it will make it near impossible for the company to continue paying out such huge interest rates. It's frustrating because it's just a novel pyramid scheme that is largely making money for those who are doing its bidding (affiliate marketing) but the truth is that whenever this train finally does come to a halt the headlines won't be (Ponzi scheme Bitconnect, unrelated to other cryptocurrencies, is exposed as a Pyramid) the headlines will, however, be:
"Multi-Billion Dollar Pyramid Scheme tied to Bitcoin"
"Cryptocurrency Pyramid scheme exposed"
"Bitcoin price plummets amid multibillion dollar pyramid scheme, SEC investigating"
That may be years from now or next week. If you're paying out huge sums of money to the whales (I.e. giant affiliate marketers and those who invest $10,000+ and get that back in 120 days), then you know it's going to crumble on the little man who invested $800 and has to wait more than 2/3 of a year to get back their amount. By the time they can, assuming the site is still working properly, bitconnect will be worth next to nothing and interest will be 0.00001%.
It's frustrating for the time being though.
The trouble is that the little guy, who invested $800 has seen it pay out, so will now invest a couple of grand. Everyone is wary of it but if you see it consistently pay out you may start to believe and put more in.
Look at the marketers. They all invested $100 initially then reinvested referrals to look good on video.
I agree that when it crashes the whole world of crypto is going to suffer. I’m sure it will recover though so may be a buying opportunity!! Just got to get the timing right.
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