Bitconnect Review: Is it Legit?

Last updated on February 23rd, 2018 at 10:10 am

99Bitcoins Editorial Note: 

Hi guys, it’s Ofir from 99Bitcoins. I think there are some things that need to be put straight before reading this review. The main thing is this – we can’t say for certain if Bitconnect is legit or not. People who are arguing that there aren’t enough evidence to support the claims made in this post are right, we wish there were more.

However, personally I wouldn’t invest my money in it. Why? Because it has too many red flags in my personal opinion. You are free to think differently, that’s your opinion. So take what’s written here with a grain of salt and let us know your opinion in the comment section. As always, none of this is investment advice, just the writer’s personal opinion.

Jan 16, 2018 update: Bitconnect is shutting down its lending and exchange services.


 

You have probably read several stories about the guys who bought $1000 of Bitcoin 5 years ago and are now millionaires. Even if you bought your first cryptocurrency at the beginning of 2017 you’re probably still pretty happy with the investment.

Some people haven’t settled for the gains to be made in an expanding market. Over the last couple of years, several Bitcoin investment schemes have popped up. One of those platforms is Bitconnect. On the face of things, there are some pretty impressive returns. Users report high rates of interest—sometimes up to 1% per day, as well as a very generous referral reward.

Just look at the price of BCC (Bitconnect Coin) over the past 8 months. It went from $0.16 to over $300. That’s an ROI of 187,500%, which is pretty crazy.

Bitconnect coin

Update: Apparently the founder of Ethereum, Vitalik Buterin is also concerned about Bitconnect’s reputation.

You’ll probably notice that BCC’s market cap has dropped dramatically on November 3rd 2017. This is due to a “[r]evised circulating supply calculation,” according to Coin Market Cap. Vitalik pointed out to TNW over email, it has not affected BitConnect Coin’s price. That is very strange as such a huge change in coin circulation should have a massive effect on the price.

What is Bitconnect?

That’s a good question, I’m not sure anyone can provide a simple answer. It seems like Bitconnect is trying to create a Bitcoin clone—with the main benefit being making money. Here’s the very perplexing intro video for the company:

Bitconnect has developed its own cryptocurrency to help users transact quickly via the inbuilt exchange. Many Bitconnect investors are aggressively chasing rewards through the service. They appear to be latecomers to the market, who have missed the recent upsurge in Bitcoin value.

I first came across the service when watching a YouTuber with the screenname Cryptonick. He reported that he made hundreds of thousands of dollars on Bitconnect through loans and referrals. Sounds too good to be true, right?

How exactly does the company operate, and make these astounding returns? What’s the secret?

How Can You Make Money with Bitconnect?

According to the website, Bitconnect utilizes a uniquely developed trading bot. It is known as “volatility software,” which takes advantage of the changing Bitcoin market. Bitcoin’s price can swing up and down by hundreds of dollars a day, so anyone who can predict these changes can make a fortune. That’s what the trading bot reportedly does, and loaning your Bitcoins to the software allows you to enjoy these returns.

Bitconnect lending terms

To make an investment, users must first buy the Bitconnect token with Bitcoin via the exchange. Then you will be able to loan the token to the Bitconnect bot. It is important to note that the investment stake is locked away, and can’t be accessed for or anywhere between 120 and 299 days.  Any interest earned is available to be immediately withdrawn.

Interestingly, referral codes come though the real moneymaker. Users with large followings (such as Cryptonick) earn a far greater return from this method. Hearing about this situation really raised the first questions in my mind. Is it a legitimate lending platform, or is it a modern Ponzi scheme? It all sounds too easy to make quick money.

So for example, if I bring in an active lender that loans out $100 BCC, I will receive a $5 commission. For any additional loans, I will receive additional commissions. But it gets even “better.” If that lender brings in additional lenders, I get 3% of their lending amount, as well as 2% of any additional lenders brought in by these lenders.

Bitconnect affiliate structre

The whole thing starts to sound a bit shady, as shown here:

Of course, this affiliate commission model makes people go crazy for spreading the word about Bitconnect. Not because there is real value in the platform, but mainly due to the fact that they want to make a quick buck.

I’m not surprised to see my old friend, who previously promoted the Bitclub Network, now promoting Bitconnect and USI Tech (supposedly another Ponzi scheme) as well.

People are even getting so creative that they are giving away their affiliate bonus, just to sign up people under their downline.

Bitconnect affiliate commission

The Company

I really wanted to find out more about Bitconnect. What is actually going on? Consider this title: “17-year-old makes $100,000 in one month.” Anywhere else on the web, you’d probably think this article is a scam. But with cryptocurrencies, it doesn’t feel like such an outlandish statement, especially when you see the exponential growth.

Then when just scratching below the company’s surface, things take a shady turn. When there is no apparent owner of a business, it is always concerning. Nobody publicly attributes their name to running the BitConnect platform, and the website gives very little away. Browsing the website doesn’t exactly inspire confidence, especially in a place where I’m meant to make an investment.

After exhausting Google’s resources, I decided to try and find some contact details for Cryptonick. I fired a couple of requests via the contact form, and even asked some of the listed partners for an introduction. All requests fell on deaf ears.

I was surprised to find that several Bitconnect iterations are currently registered in the UK. Companies House lists the original director as Ken Fitzsimmons with offices at Park Street, Ashford. A few days later, I received word that the British government is shunning the Fitzsimmons’ original company, since it didn’t file any accounts. So things really don’t appear to position BitConnect as a legitimate operation.

Companies house

Update: It has been brought to our attention that the company Bitconnect LTD perhaps isn’t the right company to investigate. After further research we have found the following:

BitConnect also listed on Companies House’s registrar as BITCONNECT INTERNATIONAL PLC.

Neither of the filings – for the PLC or the LTD – mention how BITCONNECT PLC will be affected in the event that Companies House proceeds with BITCONNECT LTD’s removal from the registrar – or how it will affect the company’s operation in the UK  BitConnect has also been listed on Companies House as BITCOIN AMR LIMITED.

One thing to keep in mind is that, prior to assuming the name BITCOIN AMR LIMITED, the company used to be registered as BITCONNECT PUBLIC LIMITED – not to be mistaken with BITCONNECT LTD. Confusing isn’t it?

According to the documents, BITCONNECT PUBLIC LIMITED (now BITCOIN AMR LIMITED) and BITCONNECT LTD were two separate entities, registered under two different company numbers: the former was logged under company number 10944876, and the latter – 10278342.

BITCONNECT INTERNATIONAL PLC, on the other hand, also has its own company number: 10948031.

Looking through the names attached to the companies though. It appears that a person named Le Thi Thannh Huy is involved in both BITCOIN AMR LIMITED as well as BITCONNECT INTERNATIONAL PLC.

 Interestingly, the documents suggest this is not the same person. Despite the similarities in name, the filing suggests the person named Thannh Huy involved in BITCOIN AMR was born in 1978, while the one involved in BITCONNECT PLC was born in 1984.

Weirdly enough, both of them appear to have indicated a correspondence address on the exact same street; the exact street numbers are not the same, however. – Source

What Is Bitconnect Up To?

The question that keeps running through my mind is: ‘If there is this great trading bot, why would they let little old me use it?’ In fact, the ‘special trading software’ line has been trotted out for every pyramid scheme under the sun. Take a look at the “promotional videos”: There’s nothing factual to see.

Simply look at how rich everybody is. You can probably make up your own conclusion after watching these videos:

Public Opinion

When it comes to BitConnect, there are some interesting opinions. I really wanted to know if anybody had made or withdrawn money. I broached the subject with a couple of my crypto Facebook groups. The results were plentiful. The vast majority dismiss it as a scam, and even reported that they just asked their administrators  about it.

But I was startled by how many people sang its praises. A strong proportion of users had been able to withdraw money from the platform, and started spending some of their gains. Some success stories are floating around, so they’re the people to investigate.

Many Bitconnect investors seem to accept that it is not a legitimate scheme, but are happy to risk capital for short-term gains. After random Facebook chats I had with Bitconnect users, here are some responses I got:

That’s correct. [It will stop eventually]. But as the amount I invested is something that if I lose, then I can sustain the loss.

“Well, maybe I have no morals. Maybe my morals lie with profits. You can’t call it a scam yet, until it is shut down and closed.”

Most users clearly know that there is no “trading bot.” But how could it be a scam if it makes money?

Here’s an interesting point to consider: There’s evidence that make the whole operation seem like a Ponzi scheme.

In addition, my interest in the platform had another unexpected result. Bitconnect users started to approach me about investing via their referral links. Plus, I suddenly had growing friend requests.

I felt like I was being courted by some sort of cult, which guaranteed wealth and financial freedom. But we already know why people want me to join their investing “team.”

Facebook messages

Taking a deeper look at Cryptonick also uncovered some grey areas. It appears that someone gave him his very first investment on Bitconnect for free. There are multiple other ‘social media cryptocelebrities’ touting the project. And it’s becoming clearer and clearer that they are leveraging their followings for personal gain.

Charlie Lee, one of the most respectable figures in the Bitcoin community and the inventor of Litecoin had this to say on Twitter:

Charlie Lee Bitconnect tweet

Former Fortress Investment Group partner Michael Novogratz took to Twitter to share his opinion that BitConnect “really seems like a scam,”.

Michael Novogratz tweet

What Is Actually Happening to Your Investment?

By piecing together the puzzle, we can start building a picture of where investments are ending up. What if there actually is no volatility software?

The first step is buying Bitconnect tokens with Bitcoin. Who owns the majority of the tokens? BitConnect. Next, you loan your tokens back to them, so they now keep control of everything. In addition, the tokens run a ‘Proof of Stake’ protocol. In other words, they make an interest on the tokens held: your tokens.

Sure, they slowly pay some interest to you for making a withdrawal, but the initial Bitcoin investment is still locked away. Who’s to stop them from walking away with all your money? The higher-ups get a bigger payout from referrals, while the lower-downs fight it out for scraps—until the money hose is turned off.

The only questions remaining are:

  • When will this happen?
  • How many people will lose their money?
  • And how much money will be wiped away?

Update: Some users have brought to our attention that Bitconnect is coming out with a prepaid debit card (much like the ones we have for Bitcoin). These cards will allow you to pay with your Bitconnect balance at various shops while cutting a commission from each transaction. This is being presented as proof that the company plans to stay here for the long run. At the time of writing the cards are only available for registration and not on the market so we can’t assess them yet.

Conclusion

From what we have looked at, there is a simple answer to how Bitconnect makes its money.  Many users accept that something isn’t quite right about the service, but they don’t care, since it’s making them money in the short term.

In the end, more people will lose the ultimate greed of the few. Investors with large amounts of money will not be so favorable when everything goes south. When Bitconnect decides that they’ve had enough, their profit from signing up new members will be a short-lived victory.

As a final check, I ran Bitconnect through our famous Bitcoin Scam Test. Although the site has some very good metrics and was almost able to pass the test, the results were the same in the end,:

Bitcoin Scam Test

Here are some additional resources that review Bitconnect:

https://steemit.com/scam/@thegrinder/the-bitconnect-scam-exposed

https://pingmod.com/2017/12/01/bitconnect-ponzi-scheme-ethereum-litecoin-founders-warn

Bitconnect.co Review – to Ponzi or Not to Ponzi…

BitConnect Review – Another Ponzi Scheme? | BitConnect Scam Exposed!

Bitcoin Video Crash Course 

Know more than 99% of the population about Bitcoin. One email a day for 7 days, short and educational, guaranteed.

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110 Comments on "Bitconnect Review: Is it Legit?"

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Frank
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Frank

Whalegate is a SCAM , not a legit service . Read more here https://bitcointalk.org/index.php?topic=2875554.0

jercy
Guest
jercy

hello sir, www bitcoinsolve com this website is better then bitconnect.co because bitcoinsolve.com paying very handsome profit also contract time mostly for 1 month, i already invested amount and getting payout before 3 months , please make video abount bitcoinsolve website .
thanks

Steven Hay
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Trusted Member
Steven Hay

WARNING: don’t fall for this site linked by jercy, it appears to be a total scam.

Jercy, you should really run the site through our Bitcoin Scam Test page:

The Bitcoin Scam Test

I can already tell it’s going to fail the test hard. They’re promising 400% returns after 70 days? C’mon, that’s too good to be true. The pyramid referral scheme on top of the obvious Ponzi just makes it worse.

We’re certainly not going to do a video on this site, unless it’s to warn people away from this obvious scam.

Baris101
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Baris101

Bitconnect A lending platform that and you daily interest from a trading bot earn from $1-1000 depending on your investment, very reliable source,
Sign up straigh away hear and recive your $100 after your first initial investment PLUS 100% commision bonus returned ( get back 5% of your investments) **affiliate link removed** if your already a user you can benefit from $150 free investment sent in bcc or btc l when you join

Craig Bruno
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Craig Bruno
So, here is my question. I understand that you can get your ‘capital investment’ back after a certain amount of time. BUT, what if you set it up so that you ‘reinvest’ your interest (instead of taking it back every day). Yes, there is potential for massive gains from compounding interest. BUT, is the interest you reinvest become considered your ‘capital investment’ and ‘re-start’ the countdown on when you can take out your compounded gains? Essentially meaning, if you’re invested over 10K originally, after 120 days, you can only get your original 10K back, and the rest of the interest… Read more »
Ankhael
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Ankhael

Everybody says they “think” it’s a scam without even taking a risk to find out. That’s the true way to find out, how do you call something a scam when you or no else haven’t been scammed yet?. I have heard or read or seeb not one person who tried bitconnect to later come out and says it’s a scam, the only way to truly test it is to make an investment that you can afford to lose and see how it plays out.

Sidbutkiss
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Sidbutkiss

But it could be a long-term scam were some people make money in the short-term but many people lose a lot of money in a year or two. I suggest you google what a ponzi scheme is

SensiblePerson
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SensiblePerson

You don’t need to take a risk to find out what you already know to be true you idiot. Why invest in a scheme that’s an obvious fraud just to give your statement legitimacy? Anyway, well done on being a sucker. You defended BCC and now you only have yourself to blame. Hope you lost everything!

Ace Jackson
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Ace Jackson
Well here’s a old quote “DONT BELIEVE WHAT YOU HEAR AND ONLY HALF OF WHAT YOU SEE” just apply it to what ever situation your in. That being said, investing is a scam period anywhere, u can invest in something an it goes into flames the next day, it’s a scam risk u gotta take, I think bitconnect is something new some ppl can’t get a hold of, as far as investing. Now this is a new era of strange things, some are good, some are bad. but u don’t wanna miss out on something good. Even if it’s a… Read more »
Dan Fernandez
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Dan Fernandez

haha BURN !

SensiblePerson
Guest
SensiblePerson

Ha ha double burn. Idiot!

SensiblePerson
Guest
SensiblePerson

How’s that Bitconnect going for you now? I hope you lost it all. Maybe a lesson for you to learn. Try to listen to others that clearly know more than you do next time. Idiot.

Mike Collins
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Mike Collins

As the man with the wooden leg said, “it’s a matter of a pinion”! So here’s mine:- 5 years ago I invested about £50 in Bitcoin, today I invested $500 into Bitconnect, I still have over £7000 in Bitcoin, am I worried about my $500? Absolutely not! Why? Because in real terms my investment cost me about £2

SensiblePerson
Guest
SensiblePerson

And how’s that $500 investment coming along? You can kid yourself and say it’s really £2, but it’s not, you put in $500, you lost $500, you now don’t have $500. Idiot.

R White
Guest
R White

Bitconnect LTD is for the company and website Bit-connect.io, not Bitconnect which is listed as BCC at Bitconnect.co with the company name of Bitconnect International PTY.
The threat to delist Bitconnect LTD. has nothing to do with ponzi scheme investigation, but due to Bitconnect LTD not filing proper yearly paperwork to the UK Registrar of Companies. The news article author did not do proper research, instead just pulled a knee-jerk FUD because they don’t like Bitconnect.
Bitconnect.co (BCC) was _never_ connected with Bitconnect LTD at the .io address.
**links removed**

Nand Gothe Hui
Guest
Nand Gothe Hui

Like the Gladiacoin, Bitconnect will be closed very soon. Until the end of the year.

Imad Daou
Guest
Imad Daou

I am afraid of one thing. Someone out there is playing it very smart. They are not after people money as much as making a bubble and then blow it up. When such bubble burst plus the media surcharge, it will hurt the Crypto currency market and the people will look at it as if the whole system of crypto coin is a scam. Bitconnect seems to be a plot and trap to hurt crypto currency reputation.

Imad Daou
Guest
Imad Daou

***Update*** I have joined Bitconnect and read all their resources at bitconnect.co, bitconnectcoin.co, and futuremoney.io and all proved me to be legitimate. So far so good and I am so happy with the free course and their platform. What it seemed to me 2 weeks ago was an influence from the amount of hate and jealousy prepared by #fakenews resources toward Bitconnect and crypto currencies overall.

SensiblePerson
Guest
SensiblePerson

And how do you feel about all those fake news articles now you absolute moron.