We all know that crypto world is somehow connected to the illicit activities. From the dark web to money laundry, many people use them for their illegal activities. In this article we are going to talk about BitConnect ; one of the most famous cryptocurrency pyramids. Many people joined this pyramid scheme and lost their assets. This company worked on Ponzi scheme and attracted a lot of victims by giving tempting promises.
As we know, all these pyramid schemes neither produce goods nor provide services. They just do network marketing. Each member of the network invites a new member and the next ones keep doing the same thing. Finally, the scheme will collapse and people who are at the top get the money and the rest will be losers.
BitConnect; a famous crypto fraud
BitConnect was one of the major crypto pyramids, which worked from 2016-2018. It led by a man, whose name was Satao Nakamoto. But, the developers of the project are unknown to this date.
In this scheme, the participants encouraged buying BCC tokens and then lock them on a special platform. There were some trading bots, which trade automatically and give profit to the investors. The developers promised to give 40% profit per month to the investors.
The pyramid scheme promised victims that if, they invest $1000 in the platform they can withdraw $50 million in three years.
Vitalik Buterin was the person who criticized the platform. He said that 1% profit per day confirms that the platform is a pyramid scheme and investors will lose their invested money. After that, Mike Novogratz and Charlie Lee, the Litecoin creator joined Buterin. They all agreed that the platform is just a pyramid scheme and people should be aware of such those platforms.
After that, the UK government started to question the organizers and asked them to reveal their business model. The organizers never respond to the government and keep attracting more people to their platform.
Meanwhile, the U.S authorities helped UK government to end the story. They called BitConnect a financial pyramid and asked people to stop investing their money in this platform. After that, the BCC token fell by 90% and investors left by total loss of $3.5 billion. Although the developers and organizers they all ran away and disappeared, the head of the Indian branch arrested in 2019.