Without a doubt, cryptocurrencies are one of the best things humanity has invented. Crypto attracts millions of believers and represents a great area for different types of enthusiasts, entrepreneurs, scientists – you name it!
Unfortunately, even here, there are individuals with less positive energy, quite simply, scammers. Today we’ll be talking about some of the biggest crypto scandals, because being warned is being informed.
BitConnect and the Ponzi scheme
BitConnect’s ICO was one of the most promising in the end of 2016. Its token BCC was one of the most rapidly growing the year after, with market capitalization $2.6 billion. Sounds like a dream… So, what went wrong?
Early suspicions came around the platform’s business model which was resembling a pyramid, or Ponzi scheme. In other words, users would be getting enormous profits in just one month (up to 40%), where the profits would depend on the initial deposit sum, the bigger the better (of course). The project was guaranteeing 1% of the ROI, daily. Who wouldn’t fall for it
As a matter of fact, Vitalik Buterin wouldn’t and that man was the first person to express his concern about BitConnect in his Twitter account. Charlie Lee, a Litecoin creator, also warned users not to put their money into this project and branded it as a ‘ponzi’.
Nevertheless, the company continued existing and getting more and more users, until it crashed in 2018. The BCC rate collapsed 96% of its price. Bearing in mind that it coincided with the Bitcoin drop, no wonder there was an army of desperate users who’d lost everything, and even special committees created to support victims of this project.
Moral of the story
In the crypto world (and not only), if something looks too good to be true, take another minute before moving forward with it. Think, analyze, check what experts think. And, following one of the main rules of trading, only use the money you can afford to lose.