Shortly after North Carolina and Texas issued a Cease and Desist Order and the UK’s notice for compulsory strike-off took effect, referral-focused cryptocurrency platform, BitConnect (BCC/USD), issued a statement on the 16th that they were halting all lending and exchange services, releasing all outstanding loans, and closing the exchange all together in just 5 days, adding, “With release of your entire active loan in the lending wallet we are transferring all your lending wallet balance to your BitConnect wallet balance at $363.62 USD.”
In their first statement, the team claimed an onslaught of bad press and DDoS attacks were responsible, in addition to the legal quagmire they’ve created for themselves have become too much of a hindrance to continue providing the core features of the platform. This essentially makes the BitConnect website a place to download the QT wallet and check your BCC coins, which crashed in value from $331 USD to less than $20 USD in just a few hours. They say they will set up API access to get online merchants to use the devalued coins.
The following day, the BitConnect team issued an update regarding the situation, back reeling on the closure of the exchange, and noting that they expect the value will bounce back. In an attempt to offer an explanation to the remaining holders of the devalued digital tokens they say, “the current BCC price drop is the direct result of us releasing all of our members’ coins at one time. We will do our best to honor the value of BCC as close to what it has been holding during past several months.”
In the same post, they promote their newest cryptocurrency, offering members outside of the US to essentially migrate their wallets to the “new, superior system” at roughly half what they just paid out of their lending wallet.
BitConnect is and always has been a scam, and through this classic referral payout method, has built one of the largest communities (1.5 million users) in the crypto community. Droves of frustrated investors are still expressing their discontent and frustration in the BitConnect subreddit which was closed to the public temporarily after the news broke.
Many of the BCC investors are new to cryptocurrency and took significant losses, so much so that it seems the suicide hotline phone number (800-273-8255) is listed in one of the top threads in the discussion board.