Yesterday evening, the collapse of a project that, apparently, had more of a Ponzi scheme than a blockchain-based cryptocurrency, was witnessed again.
BitConnect announced the cessation of its operations through its official blog, involving the closure of its home exchange and loans. The website is no longer online. The exchange operations were canceled and the loan balance reimbursed to the BitConnect portfolio at a price of $ 362, indicated by the CoinMarketCap site at the time of closing the platform. Right now, it reflects a fall of 86% and a value of $ 35.06 dollars, after having reached almost $ 400 at the end of November.
Drop of BitConnect according to CoinMarketCap.
The publication states that from now on BitConnect plans to include its API in different platforms and will seek to list this alleged cryptocurrency in other exchange offices.
During the month of November of last year, the company received orders to cease operations from the UK authorities, as well as other warnings from the Texas Securities and Exchange Commission and the North Carolina Stock Exchange Commission.
All this occurs in a context in which possible government regulations caused a sharp decline in the entire cryptoactive market during today. Although most of the cryptocoins can recover their value in the short term, the market is relentless in terms of the credibility of the different projects. BitConnect was perceived as a fraudulent scheme and its closure is inevitable given the imposition of trust and transparency as the main norm of this ecosystem.
BitConnect received a lot of criticism during its existence based on its notorious characteristics of Ponzi scheme, because with a referral system, its participants could obtain profits by lending money and being remunerated based on interest rates. However, the collapse of this scheme was not one of the reasons alleged by BitConnect, among which are argued bad press and DDoS attacks; although, apparently, investors have decided to move away from their positions.