Showing posts with label bitconnect. Show all posts
Showing posts with label bitconnect. Show all posts

Ross Davis is The Special Guest on This Week's Edition of the CRYPTONIZED Podcast - Taking Us Inside Crypto's Biggest SCAMS!

Global Crypto Press Association Editor In Chief and investigative journalist Ross Davis is the guest on this episode of the Cryptonized Podcast!

With Host Mark Fidelman, Ross discusses some of the scams he's helped expose, confront, and take down.  Plus, some big ones on the horizon we should all be concerned with... 

Play the YouTube verion above or access the show on any of these:


Missing Millions, Missing Wives...and Murder?! The Untold Story of the "Bitconnect" Crypto Scam...

Bitconnect update
John Biggaton was the public face of Bitconnect in Australia. 

But, like everyone who gave their name and showed their face publicly, he was only pretending to be a major player in the company.  In reality, John was just another participant recruiting new members to sign up underneath him, just another person holding a spot on the pyramid.

Who were the real people behind Bitconnect? We still don't know. Not their names, or even what country they operated out of.

 The real leaders made off with nearly $1 billion in Bitcoin - leaving the gullible people they convinced to organize events, like John, to take the fall. 

When it all collapsed, chaos followed.

When it comes to John Biggaton, money isn't the only thing missing. Shortly after Bitconnect's collapse, his wife disappeared as well.

Watch the video above for the full story!

For those interested in the topic of crypto scams, we suggest reading our report on one even bigger than Bitconnect in the Asian market that recently was busted called PlusToken, as well as one that's still growing and headed towards disaster called CloudToken.

Updated 12/17/19

Video Courtesy Of Seven Network Australia

The next big SCAM? New site giving daily payouts 4X higher than Bitconnect, and growing fast - here we go again...

This has been a hard one to get a grasp on, mainly because I first became aware of it through someone i've known for years, who is indeed receiving daily payouts - but I can't help but go back to the rule 'if it sounds too good to be true, it probably is' - this is no exception.  The claims are impossible to be true.

The company is called Doubly and where things get a bit blurry are how they've blended elements you may recognize from previous crypto scams, with practices typically associated with legitimate businesses.

It's that classic 'trading bot' scheme, the claim that they've developed artificial intelligence in the form of a bot that takes your investment, and it invests it better than you ever could, for quick huge returns.

SEO metric analysis shows people seem to be willing to take the risk, but just because everyone is getting paid currently is not evidence they are legitimate! Bitconnect came crashing down in a single day. Before that, they had thousands of members who would all tell you 'they've always paid me, with no problems'.

Just like Bitconnect we are looking at an unsustainable business model in the long term.  The profits they're guaranteeing are literally impossible for anything but a ponzi scheme.  They've posted this profit calculator on their website, take a look these numbers:

Showing an investment just shy of $12,000 will pay $657 per day, for 57 days until someone has been paid $36,000 - that's a $24,000 profit in less than 2 months.

It's easy to spot the things they're doing which are intended to make the case that they're different from all the other 'trading bot' scams of the past.

They show the name of the supposed founder - past scams always had anonymous owners.

They're registered as a company in the UK (but so was Bitconnect).

They show outgoing payments on their website, so they're paying .

...but remember NONE of these things are proof they have created a trading bot capable of 400% returns.

One of the other journalists here at the Global Crypto Press Association, Ross Davis, has covered some of the companies that have been using AI trading on Wall Street for years, because for the last year or so they have been trying to apply their technology to the cryptocurreny markets. When asked him about this he says:

"Even the Wall Street firms say the crypto markets are harder to predict than stocks, there so much less historical data.  They also mentioned that the best AI is hitting about 60% accuracy over a year long period - so if anyone's offering 400% returns in a couple months, it just isn't real." 

I knew 3 friends who participated in Bitconnect knowing what it was, with the idea of making a profit while it was still running.  One of those people is the person who showed me this, he calls it the "playing with fire investment strategy" where he invests $12k, gets $36 back, then invests $12k of that again "if I make it through that first round, I never lose and the worst I can do at that point is a $22,000 profit".

The problem is, he's the only 1 of my 3 friends who escaped Bitconnect with a profit, these companies rely on human nature.  "Why just invest $12k back when you could invest more, and get more?" people think.

After paying out for a few months, people feel comfortable leaving more and more in their hands.

Until the big day - when they decide to disappear.

Author: Mark Pippen
London News Desk

No, the New Zealand mass shooter was NOT involved in cryptocurrency - but he was part of a crypto-themed Ponzi scheme...

First, let me explain my intentions here - I hate when media coverage focuses on irrelevant background information of these mentally deranged mass shooters. Digging into their lives like what they did made them so interesting that suddenly their life story is newsworthy.

It's about as unproductive as approaching a crazy person on the street corner yelling at the sky and asking 'why are you doing that?' - you're never going to uncover a valid reason, one does not exist. If you need further proof, see every time you've done this in the past and note how still today we don't have any answers.

I'm writing this because the media is getting it wrong. One of the roles of The Global Crypto Press Association is to serve as a link between the mainstream media, the cryptocurrency industry, and community as a whole. My professional background includes on air and producer positions at two of the largest broadcasting companies in America, a similar background to several other reporters on our staff.

We do understand the challenges faced by journalists covering a variety of topics with a new focus every few days. It is both unrealistic to expect a journalist to know everything instantly, and unacceptable to let the current mistakes continue without addressing them.

The shooter's manifesto only says:

"...making some money investing in Bitconnect, then used the money from the investment to travel". 

But the media is saying:

"He quit his job, invested in cryptocurrency and began traveling the world using his inheritance and money from bitcoin investments" says Fox News.

"He worked for a short time before making some money from Bitconnect, a cryptocurrency like Bitcoin, then used the money to fund his travels." says ABC.

"He financed his trips with money he made from Bitconnet and cryptocurrency like bitcoin" says NY Post.

"He funded his travels by making money from BitConnect, a cryptocurrency similar to bitcoin. Organized white supremacists, some of whom are banned from using PayPal and other major digital pay systems, often trade advice online about using cryptocurrencies that promise complete anonymity in transactions. Some of the extremists avoid using banks because they believe florid conspiracy theories in which Jews control international banking." The Washington Post says in a full-on disgusting attempt at implying cryptocurrency is the payment method of choice for all the worst people. 

Ironically, the reality is almost the complete opposite - one of the most debated and controversial topics in cryptocurrency revolves around exchanges banning the same people PayPal has, not just racists, but organizations like Wikileaks as well.

Let's correct the record.

He was not involved in cryptocurrency, or anything similar to Bitcoin:

What he was involved in was a scam called Bitconnect that used the word 'cryptocurrency'. 99% of people who say they are 'into cryptocurrency' are in a completely separate world where someone promoting or sharing a link to Bitconnect would earn them an instant ban from the forum or chat room they were in.

Bitconnect was immediately mocked by the legitimate side of the cryptocurrency world since it's inception.

The only place 'cryptocurrency' comes into the picture isn't even real:

Bitconnect claimed the profits came from a trading bot they created. Using artificial intelligence this software would take the money invested and make profitable trades on the cryptocurrency markets, earning income even when things were in a slump.

This never existed.

I'm sitting here thinking 'this explanation is too short' - but it really is this simple.

There is a story here, and the media is missing it:

Implying the shooter was involved in cryptocurrency isn't just incorrect - they're missing some real insight into his mind. You have to be unintelligent, gullible, and desperate to hand your money over to a website that was promising the things Bitconnect was.

The offer he thought was legitimate: daily 1% compound interest that would turn a $10,000 investment into $500 million within 3 years. "Risk free" too, a statement the Securities Commission cited as one of the reasons they issued a cease and desist.

Bitconnect would only end up lasting months, some estimate they held up to $900 million when they disappeared.

To this day the true masterminds behind Bitconnect are still at large. There have been some arrests, but those were misunderstood by the media too. The biggest arrest was someone who just signed up a lot of people under him in the ponzi scheme, not one of Bitconnect's creators.  I covered that when it happened here if anyone is curious.

Bitconnect and I go way back, let me tell you about their members:

I am the only journalist to have confronted Bitconnect in person.

In a video that received nearly 500,000 views, I attempted to confront a representative of Bitconnect at a cryptocurrency conference with the math mentioned above, asking to explain how they plan to pay thousands of people millions of dollars each. Of course, the Bitconnect rep had no answer other than to say my math was wrong, they have ways to 'make it work' and I wasn't owed any further details.

The death threats and angry comments rolled in, and it was clear - I was speaking with some of the stupidest people I have ever encountered, and none of them were from the cryptocurrency world.

No one who had given Bitconnect their money could explain how the investment worked, but they sure did stand by it... whatever it did.

Bitconnect supporters eventually filed enough false reports to get the video removed, but a report from that day can be here.

...Just a couple months later it was all over, and Bitconnect stole everyone's money and disappeared. (That story here)

Following the collapse I contacted the guy I had confronted and learned this 'representative' was simply another victim of the scam. Just as the company was starting to garner a lot of attention, they reached out to their members, carefully selecting true believers,  and offered them pay to show up to industry conferences representing Bitconnect. A final attempt at fixing their public image of a shadowy, nameless, faceless scam.

In closing:

The correct story is of someone so lost in life, he handed his money over to shady online Ponzi scheme promising magic. He seems to have been one of the lucky few who pulled his investment out before it all came crashing down. No skill, just luck.

Journalists - equating this to being involved in cryptocurrency is like someone holding up the worst trashy tabloid magazine, with a cover story saying 'Melana Trump pregnant with alien baby' and saying that you are in the same business as whoever wrote that.

So please, stop.

To the crypto community - if you spot any incorrect claims about the shooter being involved in cryptocurrency - tweet the author a link to this.

Other publications, bloggers, anyone really - you have our permission to re-publish this article on your platforms.

Author: Ross Davis
E-Mail: Twitter:@RossFM
San Francisco News Desk

Police in India arrest low level Bitconnect promoter - while the kingpins still enjoy their freedom...

This week articles popped up with headlines like "Alleged head of BitConnect cryptocurrency scam arrested in Dubai" (link) along with many others using similar wording that would have you thinking someone of importance behind the Bitconnect scam was now behind bars.

But make no mistake - the man they arrested is a nobody, and the kingpins who walked away with hundreds of million worth of people's money are still out there enjoying their freedom.

If you're one of the long time readers here at Global Crypto Press you know Bitconnect and myself go way back.  I was one of the more vocal people in the cryptocurrency world trying to warn Bitconnect users that this wasn't going to end well for them.

I was also the only one to ever confront Bitconnect reps in person, at the Silicon Valley Blockchain Expo (That video here).

Bitconnect was a standard pyramid scheme, meaning anyone could sign up and make money from getting others to sign up as well.  The man arrested in India is nothing more than a simple Bitconnect member who signed up a bunch of people under him on the pyramid.

The accused, Divyesh Darji is being called the "head of Bitconnect in India" but is not one of the people behind Bitconnect, at all. In fact, the site was up and running and fairly popular months before the dates of Darji's first posts promoting it.

What he's guilty of is just being one of the more aggressive promoters of their referral program. Darji's mistake was going all out, loving the spotlight, and even holding seminars to entice others to join the scheme.

“Darji was living in Dubai. A look-out circular was issued against him. The Immigration Department alerted us when he was on the way from Dubai to Ahmedabad, after which he was arrested today evening. The company came into existence in 2016, and in 2017, it launched the Bitconnect coin. It remained active till January this year. It released 2.80 crore coins, out of which 1.80 crore coins were sold to investors. The accused held seminars, events in India and other countries promising high interest — daily interest rate of 1 per cent — on investment in Bitconnect coins. The cost of one Bitconnect coin on January 16, 2018, when the company shut down, was USD 362.” a spokesperson for Police stated.

The real people behind Bitconnect never showed their faces, and Darji is a perfect example of why.  Remember - the people behind it knew it was a scam from the beginning, they knew one day it would end and people would be trying to hunt them down.

I have very little pity for Bitconnect "victims" since things reached a point months before Bitconnect ran off with their money, where I believe everyone involved had heard it was a scam - and decided to ignore the warnings while they were still making a profit.

But that doesn't mean those behind the whole operation shouldn't still be punished.

That's perhaps the wildest part of this whole aftermath.  So far we have Bitconnect promoters who had popular YouTube channels promoting Bitconnect getting sued here in the US, and this guy in India getting arrested - but really, these low-level people got their money stolen in the end too.

Then when it comes to the people who actually created Bitconnect - not only have they faced no consequences, but it appears they did such a good job on concealing their identity - no one even knows their names, or what country they reside in.

So just clearing things up from the misleading headlines, no - the "head of Bitconnect" was not arrested.

The FBI's case is still officially "open" though, so maybe there is still hope.

Just filed: Additional video report with more about this story:

Author: Ross Davis
E-Mail: Twitter:@RossFM
San Francisco News Desk

YouTube now a target in Bitconnect class-action lawsuit...

YouTube has been added to the list of people and organizations in a class-action lawsuit against crypto scam Bitconnect, according to recently filed papers (link) which state:

“YouTube failed as a gatekeeper to protect its users from, and warn its users of, the very harm YouTube set out to prevent with its advertising protocols and proprietary algorithms"

The documents go on to make the case that it didn't stop with YouTube simply allowing videos promoting Bitconnect to be uploaded, but many of the video creators were rewarded by YouTube directly because the videos were monetized, stating:

"YouTube was negligent in failing to warn those victims of the harmful content for which YouTube compensated their creators and publishers."

In my opinion - this seems like a stretch.  Bitconnect 'victims' are searching for anyone to blame but themselves - the entire operation was clearly a scam from the beginning, and every legitimate person in the cryptocurrency world was sounding the alarm.

I am the only journalist to have confronted Bitconnect reps in person at the Silicon Valley Blockchain Expo (link) - I did this at the peak of Bitconnect when everyone was making money (or at least thought they were).

Bitconnect fans decided to send me death threats instead of heed the warnings from myself and others.  I saw the same things on Twitter when established people in the cryptocurrency and blockchain world tweeted warnings about Bitconnect being a ponzi scheme.  Bitconnect users simply responded in anger - saying these people were 'just jealous' that they missed out on huge profits.

Investors in Bitconnect were warned time and time again, anytime Bitconnect was mentioned online there would always be people responding calling it what it was - a scam.  But when it appeared that profits are rolling in, nobody wanted to hear it.

I'm all for everyone behind Bitconnect going to prison, and i'm fine with everyone who promoted it getting sued - but these are people *directly* involved.  The idea YouTube is now liable for what those people uploaded, and at fault for the victims believing what those videos said, is in my opinion a pathetic blame-game. 

Sure, there were videos on YouTube of people saying Bitconnect was legitimate - but what no one can explain is: why did you listen?  No one saying these things had earned any credibility, there's no reason they should ever had been considered a more reliable source than a random person on the streets.

At some point the Bitconnect 'victims' need to face the truth that something sounded too good to be true, and indeed was.

Author: Ross Davis
E-Mail: Twitter:@RossFM
San Francisco News Desk

Bitconnect scam collapsed, and CLOSED - how the scam worked, and how they made their escape...

A quick vlog I made upon finding out the news.

Being the only reporter to have attempted to confront Bitconnect in person (that story here) it only seems right I cover their final day. The company is in full collapse after announcing closing of their lending platform, their BCC coin value is in freefall - starting the day worth a little over $400, and at the time of writing this worth just $43.

This is a strange feeling.

Sure, feels good to be proven right - but I already knew I was. Whatever gratification I get from that is instantly lost when I think about everyone who just got screwed.

You see, a lot of good people were tricked by some very bad ones.

I'd guess the majority of people who participated in Bitconnect are actual "victims".  People who heard of this amazing thing called 'cryptocurrency' and browsed around Facebook or YouTube, and ended up in the hands of someone trying to build their Bitconnect referrals, and promising the moon.

Innocent confused people.  Bitconnect... Bitcoin... they sound similar enough, to someone who knows nothing about either.

That's why this isn't enjoyable. 

I love the flood of new investors in the cryptocurrency world! I want everyone to do well, and there's no satisfaction gained when I read the stories being posted on social media today of people losing everything.

So here's how their exit strategy ended up working:

- Bitconnect announces they are closing their 'lending platform'.

- Now to divert blame, they blamed US state governments, and 'bad press'.

- Then they say - everyone is getting their investment back!

- But now here's the money grab: They pay back the investment in their BCC coin.  Not in USD, not in Bitcoin - but in their own worthless coin.

- So if Bitconnect owed you $10,000, you received $10,000 worth of BCC coins.

- But just hours later, that $10,000 is only worth about $1000, as the BCC coin is in a sharp dive towards being completely worthless.

They keep the Bitcoin.  They keep the USD.  Their users got BCC.

Now we need to remove the trash from the cryptocurrency world.

So with all this in mind, it's time we unite to take out the scammers that pushed this thing.  People like YouTuber Tevon James and everyone like them.

Anyone who pushed Bitconnect - you're canceled. Your recommendations, your opinions, your posts, your vids, your tweets should be ignored from this day on.

These people will be back, with the next "get rich quick" scam. Let's make sure nobody's listening when they do.

Author: Ross Davis
San Francisco News Desk

Scammers in PANIC mode: USI-Tech bans US & Canadian users following Bitconnect's legal problems...

A day after the Bitconnect scam was served a cease and desist (full story here) the second most popular crypto scam "USI Tech" has terminated it's USA and Canadian members.

In a laughable move - they're actually blaming their own users for their troubles. Now making the case that even though their entire system functioned off people spamming and referring others - it's the users fault for sharing the links they provided.  Stating in an e-mail shared on Reddit:

We were utterly dismayed to learn that a large number of our sales partners extensively advertise our services on their own websites as well as on social media in a manner which is a breach of contract as well as illegal, and which gives the appearance that our service portfolio violates both US and Canadian law. Despite the measures which we have already initiated, this behavior has even intensified in recent weeks and months. This has already resulted in actions by the respective authorities against various distributors, as well as the first preliminary injunctions in response to this advertising behavior. 

This seems to be the beginning of the end for multiple crypto scam sites that targeted the wave of new uneducated investors.

Experts expect the Federal government of the USA to review the Texas securities board's findings and implement a nationwide ban on Bitconnect in the coming weeks, that is if Bitconnect doesn't ban them first.

Author: Oliver Redding
Seattle News Desk

BREAKING: US Government VS Bitconnect scam - "Emergency Cease and Desist" order filed by securities board...

Bitconnect is a scam that's been plaguing the cryptocurrency world for the last few months.

Today, government officials in Texas have ordered them to halt activity immediately - citing fraud, and knowingly misleading the public.

There's been others with the same fraudulent business model, but none have grown to the size of Bitconnect, which launched with perfect timing, just when cryptocurrencies exploded over the last year.

Everything about Bitconnect is made to fool people new to cryptocurrencies - if you're lucky, you probably never heard of it. But if you're in some of the social network corners filled with new crypto investors, you can't avoid the endless spam. Mainly on YouTube and Facebook.

In a nutshell - they get these ignorant people to believe they have a bot that will trade cryptocurrencies automatically, and if they loan money to that bot, they'll receive a return on their loan.

They are rewarded in the form of a totally useless cryptocurrency called "BCC".  Which looks just legit enough to fool someone who doesn't know what they're doing.

They point out that the coin is listed on "multiple exchanges". What they don't tell people is - those exchanges are the ones that accept any coin submitted, and even then - nobody wants BCC on them.  There's zero demand for the BCC coin outside of BCC's own website.  Legitimate exchanges have openly refused to hold the BCC coin.

So they have all their victims on their own exchange, bidding against each other and raising the price on a coin no one else in the world wants.  What happens if a lot of people want to turn BCC coins into cash all at once? It all comes crashing down - because there's not enough buyers if there's ever a lot of sellers. That's how this ponzi scheme eventually collapses.

So far Bitconnect has been able to pay people cashing out with new money coming in.  But their growth has already begun to slow, and many YouTuber's who made a killing referring others to the scam are now saying they've taken their money out before the full collapse happens. Warning their followers before they have a lot of people angry at them.

Even worse - the entire 'company' is set up to disappear into thin air.  At first their site was an obvious scam - horribly written broken English - you could tell this was a 3rd world operation. Since then they've cleaned it up and made it look as legitimate as possible.

However - whoever registered their business later in the UK, apparently forgot their own birth date -  it doesn't match from one form to another. The name leads to no real person.

Their office addresses? All places anyone can rent a work desk at for a day, for traveling businessmen. One YouTuber tried to call every Bitconnect "office" - no one at any of them ever heard of the company. You can listen to those calls here. 

Today, the state of Texas which is expected to be the first of many, filed an emergency cease and desist.  Stating they violated at least 3 state regulations - as well as crimes of "engaging in fraud" and statements "likely to deceive the public".

The full legal documents can be viewed here.

Author: Ross Davis
San Francisco News Desk

Wall Street Billionare Michael Novogratz: Bitconnect a "SCAM" an "old school ponzi"...

Mike Novogratz is a former Goldman Sachs partner, and head of Galaxy Investments.  Currently building a $500 Million cryptocurrency fund for large investors.

He is now the latest to add his name to the list of experts openly calling out Bitconnect for what it is - a scam.

Yesterday, after Bitconnect refused to answer questions unless they were from a pre-approved list, one of our reporters confronted them.

Cracks in the pyramid are beginning to show, from suspicious missing funds, to questionable data on their business registrations, and multiple registrations under multiple names. 

Another reporter here is working on a full investigative report to be published soon.

Author: Justin Derbek
New York News Desk

Bitconnect Ponzi-scheme CONFRONTED by reporter at Blockchain Expo 2017!

IMPORTANT NOTE:   This video occurred AFTER Bitconnect agreed to speak but ONLY IF WE ASKED NICE QUESTIONS FROM A PRE-APPROVED LIST.  That's why this isn't an interview - it's a confrontation.

Before this video, we attempted a to arrange a quiet, sit down interview, to go over the numbers with them. Bitconnect made this impossible...THEN we decided to talk to them anyway.

Bitconnect is already under official investigation in the UK, and soon may have their operations in that country shut down, and assets seized.

Just in from our Silicon Valley team covering the Blockchain Expo North America today.

My phone chimed with a text message from one of our staff at the event - only reading "check the company dropbox" and behold, this amazing video!

Ross Davis, seen in this video confronting Bitconnect staff about their impossible to sustain business model at their booth is our Editor In Chief, and heads up our Silicon Valley news desk.

The question is simple: With the current business model of Bitconnect, if someone invests $10,000 today, they will be paying them over $4,000,000 just six years from now. They make people believe it's possible because the value of their coin is going up 'just like bitcoin' but what they don't tell you is, virtually no one is buying their coin except their own customers.

I gave Ross a quick call for some background story, he said:

"Yesterday at the expo after getting past the shock that these guys were getting bold enough to show their faces at an event like this, I asked if we could schedule an interview for the following day (today), the reaction set up red flags immediately.

Our team has interviewed somewhere around 30 companies here over the last two days, about half of them reached out to us first, and all we're more than happy to be interviewed.

But only 1 asked for the questions in advance, and couldn't commit to more than a "maybe" for an interview today.

Of course, no reporter gives questions in advance unless it's a fluff piece, and like I said, nobody else wanted them - legitimate companies with nothing to hide welcome questions!"

I asked, why not just let it go?

"The day this comes crashing down, it's going to be in major newspapers and financial TV shows.  The general public still hasn't quite figured out what cryptocurrency is all about, and the day they open the New York Times or turn on CNN and hear about what Bitconnect pulled - it's going to be a stain on this entire industry."

In closing:

"We need to draw a line in the sand.  There's 'get rich quick' hustlers like Bitconnect and legitimate companies really pushing this tech, and no, we don't need to play nice with eachother."

Bitconnect has been called a ponzi scheme by virtually every respectable person in the cryptocurrency industry.  From Ethereum creater Vitalik Buterin, to Litecoin creator Charlie Lee.

We will be following Bitconnects case with the UK government over the next several weeks.
Author: Mark Pippen
London News Desk

Ethereum creator Vitalik Buterin calls Bitconnect a ponzi scheme...

File this article under "stating the obvious" but unfortunately, BitConnect's user base somehow keeps growing.

Ethereum's creator Vitalik Buterin responded to a tweet today from a Twitter user goes by the name "Ponzi crypto coins" who appearently prides himself in calling out scam coins, tweeted at him:

After telling Vitalik Bitconnect's promises of 1% daily returns, Vatalik stated (the obvious) - it's a ponzi scheme (AKA pyramid scheme).
The collapse is coming, eventually.

Author: Oliver Redding
Seattle News Desk