Bitconnect

Bitconnect was released in 2016 to allow users to lend the value of Bitconnect Coin in return for interest payments. The marquee program was the so-called lending platform where users traded Bitcoin for Bitconnect Coin and could lock in the instantaneous value of the coin for a set period of time while earning interest calculated daily. The interest payouts were determined by a so-called "trading bot". The trading bot was the most controversial piece of the Bitconnect.co system.{{Citation needed|date=March 2021}} The liquidity of the BCC cryptocurrency funded users' ability to exchange their earnings for Bitcoin.

On November 7, 2017, the government of the United Kingdom issued Bitconnect a notice with two months to prove its legitimacy.{{cite web|url=https://beta.companieshouse.gov.uk/company/10278342/filing-history|title=BITCONNECT LTD - Filing history (free information from Companies House)|website=beta.companieshouse.gov.uk|access-date=January 4, 2019|archive-date=November 11, 2017|archive-url=https://web.archive.org/web/20171111121215/https://beta.companieshouse.gov.uk/company/10278342/filing-history|url-status=live}}

On January 3, 2018, Texas State Securities Board issued a cease and desist to the company, calling it a Ponzi scheme, and citing failings in user earnings transparency, and misleading statements. Texas State Security Board and North Carolina Secretary of State Securities Division warned that Bitconnect was not registered to sell securities in their respective states.

On January 17, 2018, Bitconnect shut down, and BCC prices crashed by 92% immediately after. Bitconnect announced it would refund its loans.

On January 31, 2018, a temporary restraining order froze Bitconnect's assets, expiring on February 13.{{Cite web |title=SEC.gov {{!}} BitConnect, et al. |url=https://www.sec.gov/litigation/litreleases/lr-25286 |access-date=2023-12-23 |website=www.sec.gov}} However, Bitconnect as an entity never actually existed, so it is unclear what assets Bitconnect has (or ever had). An alleged India-region leader (one level below the founder) of Bitconnect, Divyesh Darji, was arrested in Delhi, India, on August 18, 2018.{{cite web|url=https://www.zdnet.com/article/alleged-bitconnect-head-arrested-in-dubai/|title=Alleged head of BitConnect cryptocurrency scam arrested in Dubai - ZDNet|last=Osborne|first=Charlie|website=ZDNet|access-date=October 27, 2018|archive-date=November 8, 2018|archive-url=https://web.archive.org/web/20181108132235/https://www.zdnet.com/article/alleged-bitconnect-head-arrested-in-dubai/|url-status=live}} It is suspected that Darji is connected to well-known criminal entities involved in laundering so-called "Black Money" after the Indian government's demonetization of the rupee. In 2019, Darji was arrested and released on bail in connection with a similar scam called Regal Coin.{{Cite web|url=https://www.independent.co.uk/life-style/gadgets-and-tech/news/bitcoin-scam-bitconnect-cryptocurrency-regal-coin-a8945291.html|title=Bitcoin millionaire 'on the run' after second cryptocurrency scam|website=Independent.co.uk|date=June 5, 2019|access-date=November 25, 2019|archive-date=July 11, 2019|archive-url=https://web.archive.org/web/20190711044954/https://www.independent.co.uk/life-style/gadgets-and-tech/news/bitcoin-scam-bitconnect-cryptocurrency-regal-coin-a8945291.html|url-status=live}}

Bitconnect was suspected of being a Ponzi scheme{{Cite news|url=https://www.nytimes.com/2018/01/17/technology/bitcoin-virtual-currency-bubble.html|title=Bitcoin Falls Below $10,000 as Virtual Currency Bubble Deflates|last1=Popper|first1=Nathaniel|date=2018|work=The New York Times|access-date=January 18, 2018|last2=Bowles|first2=Nellie|language=en-US|issn=0362-4331|url-status=live|archive-url=https://web.archive.org/web/20180118010804/https://www.nytimes.com/2018/01/17/technology/bitcoin-virtual-currency-bubble.html|archive-date=January 18, 2018}} because of its multilevel marketing structure and impossibly high payouts (1% daily compounded interest).{{Cite news |url=https://www.fool.com/investing/2018/01/17/bitconnect-alleged-crypto-ponzi-scheme-shutters-it.aspx |title=BitConnect, Alleged Crypto Ponzi Scheme, Shutters Its Lending and Exchange Services and Plunges 92% |last=Williams |first=Sean |work=The Motley Fool |access-date=January 18, 2018 |archive-url=https://web.archive.org/web/20180118025950/https://www.fool.com/investing/2018/01/17/bitconnect-alleged-crypto-ponzi-scheme-shutters-it.aspx |archive-date=January 18, 2018 |url-status=live |language=en}}{{Cite news|url=https://techcrunch.com/2018/01/16/bitconnect-which-has-been-accused-of-running-a-ponzi-scheme-shuts-down/|title=Bitconnect, which has been accused of running a Ponzi scheme, shuts down|last=Tepper|first=Fitz|work=TechCrunch|access-date=January 18, 2018|language=en|url-status=live|archive-url=https://web.archive.org/web/20180118001059/https://techcrunch.com/2018/01/16/bitconnect-which-has-been-accused-of-running-a-ponzi-scheme-shuts-down/|archive-date=January 18, 2018}}{{Cite news|url=https://www.cnbc.com/2018/01/17/digital-currency-plunge-may-be-healthy-for-cryptocurrency-market.html|title=Digital currency plunge may be healthy for cryptocurrency market|last=Cheng|first=Evelyn|date=January 17, 2018|work=CNBC|access-date=January 18, 2018|url-status=live|archive-url=https://web.archive.org/web/20180118012442/https://www.cnbc.com/2018/01/17/digital-currency-plunge-may-be-healthy-for-cryptocurrency-market.html|archive-date=January 18, 2018}} Bitconnect interest fluctuated greatly with the volatility of Bitcoin, which its value was tied to.

The Bitconnect Coin was among the world's top 20 most successful cryptocurrency tokens{{Cite news|url=https://www.fool.com/investing/2017/07/20/the-20-largest-cryptocurrencies-by-market-cap.aspx|title=The 20 Largest Cryptocurrencies by Market Cap|last=Williams|first=Sean|date=July 20, 2017|work=The Motley Fool|access-date=June 22, 2018|language=en|archive-date=April 16, 2018|archive-url=https://web.archive.org/web/20180416012442/https://www.fool.com/investing/2017/07/20/the-20-largest-cryptocurrencies-by-market-cap.aspx|url-status=live}} until its price collapsed after traders began losing confidence. BCC rose from a post-ICO price of $0.17 to an all-time high of US$463 in December 2017; it declined to US$0.40 as of March 11, 2019. Bitconnect released outstanding loans at US$363.62 to the Bitconnect Wallet in the form of BCC. However, soon after that news the internal exchange price and liquidity collapsed resulting in a nearly complete loss of value.{{Cite web|url=https://bitconnect.co/system-news/94/changes-coming-for-the-bitconnect-system-halt-of-lending-and-exchange-platform|title=Changes coming for the Bitconnect system - Halt of lending and exchange platform|date=January 16, 2018|website=BitConnect|archive-url=https://web.archive.org/web/20180118030000/https://bitconnect.co/system-news/94/changes-coming-for-the-bitconnect-system-halt-of-lending-and-exchange-platform|archive-date=January 18, 2018|url-status=live}}{{Cite news|url=https://techscoop.in/2018/01/bitconnect-officially-shut-down-lending-platform.html/|title=Bitconnect Shut Down it's[sic] Lending Platform Officially for Good|last=Bhargav|first=Sushant|date=January 16, 2018|work=TechScoop.in|access-date=January 18, 2018|archive-url=https://web.archive.org/web/20180118181133/https://techscoop.in/2018/01/bitconnect-officially-shut-down-lending-platform.html/|archive-date=January 18, 2018|url-status=dead}}

On January 16, 2018, Bitconnect announced it would shut down its cryptocurrency exchange and lending operation after regulators from Texas and North Carolina issued a cease and desist order against it.{{Cite news|url=https://gizmodo.com/bitconnect-anonymously-run-crypto-exchange-crashes-af-1822144652|title=BitConnect, Anonymously-Run Crypto Exchange, Crashes After States Issue Cease and Desists|last=McKay|first=Tom|date=January 17, 2018|work=Gizmodo|access-date=January 17, 2018|archive-url=https://web.archive.org/web/20180117061255/https://gizmodo.com/bitconnect-anonymously-run-crypto-exchange-crashes-af-1822144652|archive-date=January 17, 2018|url-status=live|language=en-US}}{{Cite news|url=https://www.bloomberg.com/news/articles/2018-01-16/bitconnect-closes-exchange-as-states-warn-of-unregulated-sales|title=BitConnect Closes Exchange as States Warn of Unregulated Sales|last=Kharif|first=Olga|date=January 16, 2018|work=Bloomberg|access-date=January 17, 2018|archive-url=https://web.archive.org/web/20180117001520/https://www.bloomberg.com//news/articles/2018-01-16/bitconnect-closes-exchange-as-states-warn-of-unregulated-sales|archive-date=January 17, 2018|url-status=live}}{{Cite news|url=https://nymag.com/selectall/2018/01/ponzi-scheme-bitcoin-site-bitconnect-shuts-down.html|title=The Rise and Fall of BitConnect, the Sketchiest Crypto Exchange|last=Swearingen|first=Jake|date=January 17, 2018|work=Select All|access-date=January 17, 2018|archive-url=https://web.archive.org/web/20180117144452/http://nymag.com/selectall/2018/01/ponzi-scheme-bitcoin-site-bitconnect-shuts-down.html|archive-date=January 17, 2018|url-status=live|publisher=New York Magazine|language=en}}{{Cite news|url=http://www.nasdaq.com/article/crypto-news-update-20180117-00663|title=Crypto News Update|date=January 17, 2018|work=NASDAQ.com|access-date=January 18, 2018|language=en-us|url-status=live|archive-url=https://web.archive.org/web/20180117173753/http://www.nasdaq.com/article/crypto-news-update-20180117-00663|archive-date=January 17, 2018}} On January 31, 2018, a U.S. District Court, Western District of Kentucky, granted a temporary restraining order freezing Bitconnect's assets and "to disclose cryptocurrency wallet and trading account addresses, as well as the identities of anyone to whom Bitconnect has sent digital currencies within the last 90 days".{{citation needed|date=May 2019}}

In September 2021, the U.S. Securities and Exchange Commission sued Bitconnect, alongside its founder Indian Satish Kumbhani, American Glenn Arcaro, who served as Bitconnect's lead national promoter in the United States from August 2017 to January 2018, and Future Money LTD, a company Arcaro created to lure into Bitconnect's lending program. The SEC alleged that Bitconnect defrauded U.S. investors a total of $2.4 billion.{{Cite news|last=Michaels|first=Dave|date=September 1, 2021|title=SEC Sues BitConnect and Founder, Alleging Massive Cryptocurrency Scam of World-Wide Investors|language=en-US|work=Wall Street Journal|url=https://www.wsj.com/articles/sec-sues-bitconnect-and-founder-alleging-massive-cryptocurrency-scam-of-world-wide-investors-11630535853|access-date=September 2, 2021|issn=0099-9660|archive-date=September 1, 2021|archive-url=https://web.archive.org/web/20210901233854/https://www.wsj.com/articles/sec-sues-bitconnect-and-founder-alleging-massive-cryptocurrency-scam-of-world-wide-investors-11630535853|url-status=live}}{{cite web|url=https://www.sec.gov/litigation/complaints/2021/comp-pr2021-172.pdf |title=Complaint against BitConnect, Satish Kumbhani, Glenn Arcaro, and Future Money Ltd. |publisher=Securities and Exchange Commission |date=September 1, 2021 |url-status=dead |archive-url=https://web.archive.org/web/20210902114638/https://www.sec.gov/litigation/complaints/2021/comp-pr2021-172.pdf |archive-date=September 2, 2021 }}{{Cite web|title=Cryptoexchange founder accused of defrauding investors of $2 billion|url=https://www.cbsnews.com/news/bitconnect-satish-kumbhani-sec-lawsuit-ponzi-scheme-two-billion/|access-date=September 2, 2021|website=www.cbsnews.com|date=September 2021|language=en-US|archive-date=September 1, 2021|archive-url=https://web.archive.org/web/20210901232858/https://www.cbsnews.com/news/bitconnect-satish-kumbhani-sec-lawsuit-ponzi-scheme-two-billion/|url-status=live}}{{Cite web |date=2022-02-25 |title=Office of Public Affairs {{!}} BitConnect Founder Indicted in Global $2.4 Billion Cryptocurrency Scheme {{!}} United States Department of Justice |url=https://www.justice.gov/opa/pr/bitconnect-founder-indicted-global-24-billion-cryptocurrency-scheme |access-date=2024-03-12 |website=www.justice.gov |language=en |archive-date=March 6, 2022 |archive-url=https://web.archive.org/web/20220306210627/https://www.justice.gov/opa/pr/bitconnect-founder-indicted-global-24-billion-cryptocurrency-scheme |url-status=live }}

Parallel to SEC civil charges, the United States Department of Justice (DOJ) had initiated criminal charges against Arcaro. On September 1, 2021, Arcaro pleaded guilty of criminal charges pressed by the DOJ which includes conspiracy to commit wire fraud and criminal forfeiture.{{Cite web|date=September 5, 2021|title=US SEC charges Indian citizen for bitcoin scam|url=https://cryptovakil.in/bitconnect-scam-sec-charges-indian-satish/|url-status=dead|access-date=September 6, 2021|archive-date=September 6, 2021|archive-url=https://web.archive.org/web/20210906071840/https://cryptovakil.in/bitconnect-scam-sec-charges-indian-satish/}} The DOJ also indicted Kumbhani on various federal charges in February 2022, including money laundering and fraud.{{Cite web |date=2022-02-25 |title=BitConnect Founder Indicted in Global $2.4 Billion Cryptocurrency Scheme |url=https://www.justice.gov/opa/pr/bitconnect-founder-indicted-global-24-billion-cryptocurrency-scheme |access-date=2022-03-06 |website=www.justice.gov |language=en |archive-date=March 6, 2022 |archive-url=https://web.archive.org/web/20220306210627/https://www.justice.gov/opa/pr/bitconnect-founder-indicted-global-24-billion-cryptocurrency-scheme |url-status=live }}

On January 12, 2023, a federal district court in San Diego ordered that Arcaro pay $17 million in restitution to be distributed to approximately 800 victims. {{Cite web |date=2023-01-12 |title=Crypto Fraud Victims Receive Over $17 Million in Restitution from BitConnect Scheme |url=https://www.justice.gov/opa/pr/crypto-fraud-victims-receive-over-17-million-restitution-bitconnect-scheme |access-date=2023-05-12 |website=www.justice.gov |language=en |archive-date=May 12, 2023 |archive-url=https://web.archive.org/web/20230512064612/https://www.justice.gov/opa/pr/crypto-fraud-victims-receive-over-17-million-restitution-bitconnect-scheme |url-status=live }} He also agreed to forfeit more than $24 million, which could also be used in the future to repay victims. {{Cite web |last=Riggins |first=Alex |date=2023-01-13 |title=San Diego judge orders $17 million restitution payment in BitConnect pyramid scheme |url=https://www.sandiegouniontribune.com/news/courts/story/2023-01-13/restitution-biconnect-cryptocurrency-ponzi-scheme |access-date=2023-05-12 |website=San Diego Union-Tribune |language=en-US |archive-date=May 12, 2023 |archive-url=https://web.archive.org/web/20230512064612/https://www.sandiegouniontribune.com/news/courts/story/2023-01-13/restitution-biconnect-cryptocurrency-ponzi-scheme |url-status=live }}

On October 28, 2017, Bitconnect held its first (and only) annual ceremony in Pattaya, Thailand. During the event, an investor named Carlos Matos from New York City gave an exuberant presentation and testimonial about the website, which included him intensely screaming "Bitconnect!" several times in a variety of registers;{{Cite web|url=https://www.inverse.com/article/40894-bitconnect-carlos-meme-cryptocurrency|title='Bitconnect Carlos' Meme Is Everything Wrong With Cryptocurrency Hype|last=Paez|first=Danny|website=Inverse|date=February 2, 2018|language=en|access-date=January 16, 2019|archive-date=January 16, 2019|archive-url=https://web.archive.org/web/20190116201103/https://www.inverse.com/article/40894-bitconnect-carlos-meme-cryptocurrency|url-status=live}} this quickly became an Internet meme. Both the Internet meme and the questionable practices of Bitconnect were profiled by John Oliver and Keegan-Michael Key on the program Last Week Tonight.{{Cite web|url=https://www.youtube.com/watch?v=g6iDZspbRMg|title=Cryptocurrencies|last=Oliver|first=John|website=Youtube|language=en|access-date=July 11, 2022|archive-date=July 11, 2022|archive-url=https://web.archive.org/web/20220711085925/https://www.youtube.com/watch?v=g6iDZspbRMg|url-status=live}}

• List of cryptocurrencies
• OneCoin
• PlusToken
• USI Tech

{{Reflist}}

• {{official website|https://bitconnect.co/}} ([https://web.archive.org/web/20181128120223/http://bitconnect.co/ last archived version, 28 November 2018])

{{Cryptocurrencies}}

{{Portalbar|Internet|Economics|Free and open-source software}}

{{Authority control}}

Category:Blockchains

Category:Cryptocurrency projects

Category:Internet memes introduced in 2018

Category:Crypto Ponzi schemes

Category:Cryptocurrency scams

Category:Cybercrime in India

Category:Fraud in India