BitConnect Lending — An Update on Compensation and Getting Money Out
Yesterday, I wrote this article, based on information provided someone I trust, who has partnered with BitConnect to provide education on the platform. This video has since been removed and they have created a second video to apologise for the incorrect information in the first video and has provided new, correct information.
The summary is that BitConnect are reimbursing people at a fixed rate of 363.62 USD, however they are paying this in BitConnectCoin (BCC), not in BitCoin. As the value of BCC has dropped significantly on external exchanges (it went as low at $5.93 and is currently at about $65 (it is gone up VERY quickly over the past few hours) — a long way short of the $363.62 rate. Unfortunately, this means that as it stands, people (myself included) have lost money (a large percentage).
The options available now are to:
- Hold the BCC and hope that its value keeps increasing (it is unlikely to go up to previous levels, given that their primary service i.e. Lending; is no longer available)
- Stake the BCC (links: overview of staking BCC, how to stake BCC) and hope that its value keeps increasing (it is unlikely to go up to previous levels, given that their primary service i.e. Lending; is no longer available)
- Accept the loss and convert now to BitCoin
- Convert to BitConnectX (where they are giving a fixed rate of 1x BCC = $150 = 3x BitConnectX, which less than half than the value that they have given us in BCC, but currently more than what we can get for BCC in external exchanges). The future value of BitConnectX is an unknown
I’m going to go with option 2…
So in short:
- Yes, people (including myself) have lost a large percentage of money on the basis of what is available today
- Was BitConnect a Ponzi scheme? No, I don’t think so. They were challenged with issues that they were not able to overcome
What Challenges Caused BitConnect to End their Lending System?
My understanding is that these are the issues that led to the demise of the BitConnect lending system:
- Cease and Desist letters from 2 states in the USA
- USA based promoters (with large social media based audiences) suddenly stopped promoting BitConnect. This was because they didn’t want to get into legal issues. The act of these large social presences suddenly disappearing caused some people to panic
- There were DDOS attacks on the BitConnect systems, which could have been resolved, but were not done so as quickly as they should have been
- There was a significant amount of fear and misinformation being presented by people (no evidence was being provided by these people, it was just fearmongering)
- Other websites have offered a similar lending service — and most/all of these have only lasted a few weeks or months, not the duration that BitConnect had. This cause people to compare BitConnect to those sites, saying that BitConnect must therefore be a ponzi scheme
It is a huge shock to the users of BitConnect, as well as its partners, that it ended so suddenly. I think that with the right management, it would have continued to exist — and to grow. I for one am very upset that it has gone — not because I have lost money, but because it was a model that was working, was sustainable and had a very bright future.