A lot of us are hearing about Crypto Currency Ponzi Schemes and how it is truly bleeding out and staining the name of Crypto Currencies internationally. Here recently many new crypto currencies have come out suspicious of exactly this but what is a Ponzi Scheme in the first place? (https://www.sec.gov/fast-answers/answersponzihtm.html) Straight from the U.S. Securities and Exchange Commission website definition as follows "A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business." Wow that was a lot but we first have to clear it up and get a basic understanding. Here recently BitConnect was highlighted and suspected by Texas and North Carolina with a cease-and-desist letter from U.S. state regulators ultimately sending a wave of panic for many American BitConnect investors. Could this have been what caused BitConnect's server to go down or was it bad media attention maybe possibly it was the DDos attack all at the same time while they launch a new ICO BitConnectX. Even though BitConnect server became operational after nearly 5 days of being down they had announced a shut down of there "Lending" platform and "Referral" program but was going to allow the exchange to stay operational. BitConnect's excuse for the BitConnect Coins over 90% devaluation within a 24 hour period was due to them releasing all the coins to there investors. It was odd because in forgien exchanges BitConnect Coins was still trading $200 USD while in American exchanges it was trading around $36 dollars. BitConnect had over a $2.5 million dollar market cap and within a week dweendled down to just over $140 million dollars a massive cut to Bitconnect investors as they got penny's back on there dollars for the now useless BCC while the creators of BitConnect walk away with Bitcoin unscathed. What may have been another billion dollar exit scheme we all need to be aware and ready to do are due diligence on and ICO or any Crypto Currency before ever investing. I hope we can inform and educate new people investing in Crypto Currencies instead of tricking new investors into suspected Ponzi Schemes tarnishing the Blockchain and Crypto Community and pushing away potentially new investors into an exciting new era of decentralization and security!
*$2.5 Billion