It’s been a week now that Bitconnect, a popular but controversial site for trading and lending cryptocurrency closed down operations. Bitconnect had recently been accused of running a Ponzi scheme—the financial fraud most famously perpetrated by Bernie Madoff—by several influential investors, including Ethereum co-founder Vitalik Buterin and billionaire cryptocurrency investor Mike Novogratv.
Some Bitconnect clients interpreted the abrupt shutdown as confirmation of those suspicions, and worried they would not be able to withdraw their money if the exchange, whose management team remains anonymous, became insolvent. While Bitconnect, whose own digital token had risen to more than $2 billion in market value as recently as last week, promised that investors would be able to withdraw their funds at an average of the cryptocurrency’s recent exchange rate, doubts persisted. Bitconnect’s own cryptocurrency quickly lost as much as 90% of its value.
In explaining its reasons for closing shop, Bitconnect cited the relentless cyberattacks it was experiencing along with “bad press” and “cease and desist” letters it received from two U.S. securities regulators. The threat of governments cracking down on cryptocurrency trading has been a major driver behind the ongoing market selloff, with prices taking a dive after reports this week that regulators in China and South Korea were looking to ban cryptocurrency exchange.
Earlier on, we many to stay off Bitconnect and other ponzi like investment schemes. But then many get confused or sometimes knowingly blinded by the revenue and even thought that the profits were legit. Any investment that is too good to be true and is a ponzi or MLM scheme in the form of Cryptocurrency please resist the urge to invest, while they have money you can make a good windfall but when they wrap up, you hold bag of crypto sand.