The Federal Bureau of Investigation of the US is seeking to speak to those investors who were burned by what has perhaps become the best-known scam in cryptocurrency history, Bitconnect.
The word, Bitconnect, is now synonymous with scams targetting the digital currency community. It was not just one of the more brazen efforts, but also one of the most successful one.
The FBI writes –
“By mid-December 2017, BCC boasted a market cap of over $2.5 billion. Bitconnect guaranteed investors up to a 10% total return per month on their investment, following a tiered-investment system based on the sum of an investor’s initial deposit.”
“The entire market for BCC crashed in late January 2018, after two U.S. state-level securities regulators issued public letters warning investors of the Ponzi-type nature of Bitconnect. This led to Bitconnect completely shutting down its exchange for BCC, eliminating the market for the cryptocurrency and stranding investors with near-worthless cryptocurrency.”
Rapid Collapse of a Multi-Billion Dollar Ponzi
Texas had issued a cease and desist order to Bitconnect before the company chose the gig was up. India and Australia have already nabbed the representatives who promoted the Ponzi operation.
Probably the most interesting case surrounding Bitconnect is that of Australian John Biggaton, whose wife went missing before his arrest.
Formerly a fiat world financial advisor, Biggaton became one of the leading promoters of the Bitconnect Ponzi scheme. A few aspects of the scheme ensured returns of 10% or more to the victims.
Irrespective of criminal investigations ongoing, Bitconnect is facing multiple lawsuits in the US. A US court issued an order to freeze the assets in January.
Is Bitconnect Community Recovering the Coin?
Bitconnect Community members, in the wake of its collapse, look to be attempting a revival. We have seen this before Paycoin scandal.
Following the collapse of GAW Miners’ Ponzi scheme, a few Paycoin community members continued their efforts for developing as well as reviving the token. However, their efforts were unsuccessful.
While the US Federal Bureau of Investigation is looking for victims of the Bitconnect scheme, the community is looking for people interesting in reviving the coin as part of “community effort.”