In a release on its site the platform stated the shutdown is credited to “ constant criticism ” surrounding the platform, 2 stop and desist letters from both Texas and North Carolina’ s securities boards, and constant DDoS attacks on the platform.
While the platform states they’ re reimbursing all impressive loans at a rate of $363.62 USD (approximately the token’ s rate over the last 15 days ), the Bitconnect token is presently trading down ~ 80 %and worth less than $40, so while users might have been made entire on a BCC-equivlent, numerous are definitely suffering extreme monetary losses in regards to USD or Bitcoin (which is how they made their initial financial investment).
Many in the cryptocurrency neighborhood have actually honestly implicated Bitconnnect of running a Ponzi plan, consisting of Ethereum creator Vitalik Buterin .
The platform was powered by a token called BCC (not to be puzzled with BCH, or Bitcoin Cash ), which is basically ineffective now that the trading platform has actually closed down. In the last The token has actually plunged more than 80% to about $37, below over $200 simply a couple of hours back.
If you aren ’ t acquainted with the platform, Bitconnect was an anonymously-run website where users might lend their cryptocurrency to the business in exchange for outsized returns depending upon the length of time the loan was for. A$10,000 loan for 180 days would supposedly provide you ~ 40 %returns each month, with a. 20% everyday reward.
Bitconnect likewise had a successful multi-level recommendation function, which likewise made it rather similar to a pyramid plan with countless social networks users aiming to drive signups utilizing their recommendation code.
The platform stated it produced returns for users utilizing Bitconnnect ’ s trading bot and “ volatility trading software application ”, which typically balanced around 1%each day.
Of course making money from market changes and volatility is a genuine trading technique, and one utilized by lots of institutional traders and hedge funds. Bitconnect ’ s assure(and payment)of surefire and outsized returns led numerous to think it was a ponzi plan that was paying out existing loan interest with freshly vowed loans.
Below is the chart that would figure out just how much users would make the utilizing the platform.
All Bitconnect loans were denominated in U.S dollars however needed to be made in BCC, the platform ’ s native cryptocurrency. In order to make a loan users would have to deposit bitcoin into the platform then exchange it for BCC at whatever the market rate was. And loan interest and principal was likewise just paid just in BCC, suggesting users would need to transform it back to bitcoin (then if wanted, USD )after the loan term was completed.
The requirement of having BCC to take part in the financing program resulted in a natural spike in need(and cost)of BCC. In less than a year the currency went from deserving less than a dollar (with a market cap in the millions) to a all-time high of ~$430.00 with a market cap above $2.6 B.
But now without any other usages for the token, it ’ s most likely that the rate will continue to drop. The business did state that the ICO for their Bitconnect X trading platform will still occur, which trading for the BCC token will continue there.