The Bitconnect Scam – The Biggest Ponzi Scheme in Crypto Industry

The Bitconnect Scam

One of the biggest and most well-known Ponzi schemes to be found in cryptocurrency history is the Bitconnect scam. The project took just over a year to transform itself from an obscure ICO into a crypto project that was valued at a whopping $2.6 billion. But, eight months later, Bitconnect has now been delisted from every single cryptocurrency exchange that exists today. This means that the BCC token is now effectively worthless and BCC token holders have had to deal with a 100% loss.


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Avoiding fraudulent schemes completely is almost impossible in an industry like cryptocurrency, but investors should always use common sense and do thorough research before investing their money into anything. It is a good idea to use a fraud protection service for monitoring your accounts and highlighting any suspicious activities. Let’s take a close look at what happened in the Bitconnect scam.


On 15th November, 2016, Bitconnect launched its ICO and the crowd sale was closed on 30th December. How much did they raise? They were only able to raise a total of 468 Bitcoins, which had a value of $410,000 at that time. Before the ICO-bubble in 2017, this was what most projects were able to raise. These days, crypto projects raise anywhere between $10M and $50M. Bitconnect was introduced in a completely different market than what we know these days.

The most interesting thing to know about Bitconnect’s ICO is that it had no whitepaper. In addition, their team was also completely anonymous and it was unclear as to what the project intended to do.

Warning Signs

Bitconnect announced the introduction of their lending platform in 2017. This is when BCC began to gain attention and traction in the market. However, there were clear indications of Bitconnect being a Ponzi scheme. The cryptocurrency’s website began promising to give returns of 480% per year to the investors in USD and it even guaranteed a 91% profit. The worst part was that the Bitconnect scam actively promoted the idea that there was a no financial risk and it was a one-way bet. These were all warning signs because an annual return of 5% to 10% is deemed solid in most of the assets.

These returns were abnormal, but Bitconnect explained these concerns away by claiming to have a special trading robot that worked efficiently and didn’t lose. The worst part about the Bitconnect scam was that they didn’t show any evidence of this trading robot. Investors only assumed its existence and accepted that it could do what they were claiming. If you crunch the numbers, Bitconnect effectively promised its customers returns of 91% to 571% a year to all those investors who were willing to invest more than $10,010.

These figures were only for those who were investing their own money. The BCC team introduced another way for people to make more money. They developed a very lucrative referral system. The affiliate structure of the program was exactly like a pyramid scheme. If people referred anyone to Bitconnect directly, they would earn a percentage of the amount they would invest on the platform. Hence, if you referred a friend and they let $10,010, then you would receive $700 in the form of BCC tokens. This was quite lucrative, but the referral system didn’t end here.

If your friend also referred someone, you would earn about 3% of what this person would invest in the landing platform and so on. There were a total of seven levels of referrals. The most important thing to note about the Bitconnect scam was that the referral percentages were guaranteed. Thus, if the trading bot existed it had to give greater returns than the advertised 0.25% or else the referral program wouldn’t be able to provide the said returns.

The stats were also worrisome. According to the numbers provided, if you had invested $10,010 into Bitconnect and continued to reinvest everything into the platform for 10 years, you would have earned $92 million by the end. This would have been if you hadn’t earned anything in referral fees and the volatility software interest would be 0% that month. While $92 million wouldn’t make you the richest person in the world, it was still a staggering sum.

Another indication of the Bitconnect scam was that there were no details about how you would get your capital back. Sure, it is reasonable to lend your capital for a specific time period, but almost every legitimate product provides investors with a way to get their money back whenever they like. Financial products do provide this option to investors, even if there is a fee associated with it. But, Bitconnect didn’t provide its investors with this option. It was as if they wanted to lock their money into the BCC system to keep the Ponzi scheme up and running for as long as possible. However, the collapse was inevitable and it happened.

In fact, there had been warning signs early on about the Bitconnect Scam. They had announced the BCC lending platform on the Bitconnect website, but this announcement had some glaring spelling errors. Poor spelling is a red flag because any big reputable company would have checked the announcement for errors before publishing it. After all, it is scams that have these errors because they are not likely to have many employees because first, it is expensive and secondly, they don’t want a lot of witnesses.

The business model and mechanics of the scheme also had their warning signs. As per the model, the user had to buy BCC and then convert it into USD for lending. It seemed as if BCC was immune from any price downside. However, when it came to lending, it became apparent that Bitconnect hadn’t really converted the BCC into USD and they had just sat on the money. Essentially, in Bitconnect scam, people handed money to Bitconnect and kept chasing BCC coins that were constantly reduced in supply and this boosted their demand.

Final Word

The BCC Ponzi scheme remains the biggest scam and realistically, many investors will not be getting their money back unless they get help from professionals.

Get a FREE consultation with a Fund Recovery Agent. A top fund recovery agency helping thousands of investment and trading scam victims get back their funds in over 40 countries!

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