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NEVER Forget The Lessons From The Bitconnect & One Coin Scams

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Coin One and Bitconnect Scam

Disclaimer: We are calling Bitconnect and One Coin as scams in this article as a matter of opinion based on how many people lost their life savings.  We are not in a position to determine whether or not these are indeed scams from a legal point of view.

Top 5 Cryptocurrencies 2020

There is a scene in the movie ‘V for Vendetta’ in which V says “Remember, remember, the fifth of November”.  

That whole movie’s premise was that people are generally courageous – they just need a way to remember what they have forgotten or grown numb to.

Crypto space is facing such an apathy and numbness to the scammers and shillers that sprout like the filthy fungi they are, everywhere.  

These filthy shitheads steal the money from hard working folk who come to Crypto as an alternative to the injustices of the mainstream, only to find out that the cure is worse than the disease.

For this very reason, remembering the past scams and how they were carried out will serve as a warning sign for the newbies and a friendly nudge for the crypto veterans.  

When we talk about the scams of scale in the crypto space then nothing really comes close in grandiosity and elaborate schematics than One Coin and Bitconnect.

We should forget the scams of the past but not the lessons they left behind.  In that spirit, this entire post is a recap of the two big scams that crypto verse has seen and the lessons that they left behind.  These lessons, if remembered, will serve everyone well.

Bitconnect scam in brief

Bitconnect Scam

Bitconnect’s lure was that investors could buy Bitconnect Coin (BCC) in exchange for their Bitcoin and other crypto (including USD stablecoins) and lock their BCC with the platform to earn a ridiculous amount of interest.  

For instance, they promised 40% per month interest and .25% daily interest on deposits exceeding $10,000.  

Essentially, investors gave up Bitcoin and real money in exchange for BCC in the hope of earning crazy interest.  One of their promises actually meant turning $1000 into $50 Million dollars within 3 years, if their compound interest model was to be believed.  

Another hallmark of this project was the ‘referral’ system where those who bring new investors will stand to gain a handsome 7% referral fees in addition to earning a cut from those referred by their referrals.  A classic pyramid ponzi.

Even with such ridiculous warnings on the wall, investors were blindsided by the FOMO and YouTube shillers they trusted.  

The elaborate scheme came to a screeching halt when the Texas Securities Board and North Carolina Board issued ‘cease and desist’ orders to Bitconnect.

The price of Bitconnect which was coasting at $377 on January 7th, 2018 came crumbling down to $8 by January 28th, 2018.  A fall of 98%.   

This left the investors in a shock.

Since the unfolding of this elaborate scam, the FBI has been investigating the Bitconnect.  They have issued a statement and soliciting information from the victims: “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.”

Bitconnect’s scam had the hallmarks of a classic ponzi scam including:

  • Crazy rate of return without any actual product or service
  • Pyramid referral system
  • Lack of transparency about the core team
  • Lack of reliable backers or advisors on the platform
  • Too many shillers promoting the project for affiliate commissions

NOTE: If you are a victim of the Bitconnect scam, you can help the FBI with their investigation by completing a brief questionnaire.

One Coin scam in brief

One Coin Scam

OneCoin is one THE biggest exit scam in the crypto space costing investors an estimated $4 Billion.  Yet, the signs were not apparent with the OneCoin.  

OneCoin claimed itself to be a cryptocurrency that people could mine and use it as a payment system.  

Their official channel and the video is still available:

Because people were given the option to mine the coins, it was difficult to suspect a foul play.  However, the mining was not a Proof of Work where you use your computer to mine the coins, they used a Proof of Stake model.  

How do you stake if you don’t have the coins?

You cannot.  

Here is where the evil genius was incredible. OneCoin offered various packages with different staking output rates.

For instance, check the rate of staking output in below table:

One coin rate of staking output

Not just that, some packages were listed for insane price:

Coinone Package

Here is Ruja herself selling a package on top of existing packages as a ‘special time sensitive’ deal to the innocent investors.

“The bitch of Wall Street meets MLM”

The true success of OneCoin was clubbing the OneCoin staking model with a pyramid like Multi-Level Marketing (MLM) model. 

Dr. Ruja’s ingenious plan took a moonshot when she involved the who’s who of the MLM industry who were quickly lured into selling OneCoin to their network to tap into the insane gains.  Some of them even made millions in just commissions.

These MLM marketers then bought more OneCoin to qualify for a higher payouts and potential of minting millions when OneCoin hits €100.

She not only convinced the most successful businessmen from the MLM world to work for OneCoin, she even got them by the chops by luring them to invest their own profits back into the OneCoin.

Dr. Ruja referred to herself as ““the bitch of Wall Street, meets MLM”.   And she indeed was.

Evils beyond control of Dr. Ruja

The BBC expose describes that Dr. Ruja never wanted the OneCoin scam to grow as big as it did.  But once it did, she couldn’t stop it because she was not let to.  

BBC article reveals that “People involved at the early stages have told him it was never supposed to be a billion-dollar scam. She tried to close it down, he says, but the dark forces wouldn’t let her.”

At the end, Dr. Ruja’s brainchild helped many shillers, scammers and evil forces to become filthy rich while leaving many innocent investors who were looking to become rich with OneCoin were burnt and left to ashes.

Dr. Ruja’s brother was arrested in the US on money laundering charges.  Dr. Ruja is still at large. 

In summary, here is how OneCoin scam unfolded:

  • Dr. Ruja introduced OneCoin as the ‘bitcoin killer’
  • Investors were required to buy into packages to be able to mine OneCoin
  • Packages ran from €140 to €55000 (and more)
  • Investors inviting others to the platform were paid commissions
  • These commissions were paid in 60% cash and 40% OneCoin
  • Many people re-invested their commissions back into OneCoin in the hope of becoming millionaires
  • Dr. Ruja has been missing since 2017 although her brother was arrested in the US on Money Laundering charges
  • The total scam is estimated to be over $4 Billion although many people believe it might be in the ballpark of over $10 Billion

Lessons learned from One Coin and Bitconnect debacle

Every ponzi-pyramid-scam scheme has a few themes that can help you identify them before losing money or FOMO in.

Here are a few:

crypto Scam Alert

  • Salesmen or confidants?

One determining factor that seems to work almost every time is the gut feeling.   

Are you getting a sense of dealing with an old car salesman or are you feeling like you’re talking to someone who is passionate about what they are doing.  

This key distinction is what your gut is great at picking on.  

Do not ignore it.  

We run away whenever we are dealing with salesy folks, even if the project sounds ok.  Prime example:  

We stayed away from Bidao ICO project because of their salesy ICO structure.  

Don’t ignore your gut feeling, it is right most of the time. 

  • Too good to be true

If it is too good to be true, then it probably is a scam.  

While there are exceptions to this rule when it comes to Bitcoin and seed investment, they take incredible patience and they never promise anything.  Contrast to that, the ponzi-pyramid-scams all promise the sky and beyond.  If it sounds too good to be true – think again before handing your wallet over.

  • Stinks like a ‘get rich quick’ scheme rather than an investment

Retire within 6 months  |  Make a year’s worth salary over a weekend | This is next bitcoin, but better | Plug and play, watch your income multiply without any work | No work or experience needed, we will do it for you, just give us your money.

All of these statements are designed to do one thing and one thing only: separate you from your hard earned money.

  • No actual product or solution

If all you see in a business is a ‘promise’ to pay you exorbitant amounts of returns on your investment but they have no product or service in place, that is a clear indication that they are a ponzi.

Even if you do see a product or service and if that is mediocre at best or looks like it has been mashed up together to lure people – dig more before you part with your money.

  • Lure of Insider information

Crypto gurus are experts at this.  

Their pitch always starts something like “we have just uncovered this massive movement that no one is seeing, and this could turn your $1000 to $1 Million in 6 months” or something in those lines.  

If you read such hyperbole – know that they are out to get you.

  • Tier systems

Tier system: Invest $100 get 5% free, Invest $1000 get 15% free and so on, these are classic tier systems.  They also take shape of ‘invite 5 friends and get this benefit, invite 15 friends and become a VIP, etc.,’ 

Not all tier systems are a scam. Most are.

If the program structure is such that you get a cut from every new ‘victim’ you introduce then it is most probably a scam waiting to happen.

The people who get involved early in this pyramid scam do get money and that is why they honestly believe that they have discovered a gold mine and it is difficult for most of them to believe that they are innocently perpetuating a scam.  

This lure of making boat loads of money pushes them to pimp the project even harder making the inventors of the scam super rich.

  • FOMO offers

FomoInvest in the next 3 hours and get this bonus | Leave everyone behind by investing early |  First 1000 investors will be elite members eligible for special dividends | Difference between investing now and a month later is $150000000000 | and so on.

If the pitch is designed to appeal to your greed and instigates a Fear of Missing Out response, take a deep breath.  Are you about to take a plunge into scam-verse?

  • Glitter, lots of it

One of the hallmarks of an elaborate scam is the grand events and expensive venues.

Why not, it’s not their hard earned money that they are splurging.  

These events usually take place in grandiose settings, blasting music, food and beverages flowing freely and glamor is everywhere.  

People fall for the glamor in the hopes that they too will be living this shiny life themselves one day.  

That lure for glamor is the kiss of death for their hard earned money.   If you see too much glitter – run away before it sticks on you.

  • Lock in your capital, no thanks

One of the giveaways of a scam is the promise to pay you interest and your capital back after a specified term.  

For instance, a company could promise to return your Bitcoin with a 50% interest if you lock in for 6 months or a year or so.  

If they can convince enough people to do the same, they can just return the money from the people who invested after you to make the market believe that they are indeed paying the crazy interest promised and thus creating a FOMO in the unassuming investors.  

Once it scales – they can shut the door without raising the flags since everyone would be waiting for the time to lapse.  

  • Lack of reliable backers/advisors

You will not find people with great reputation involved in the projects.  The people who do lend their name or become part of the team will be the ones with hard to verify history or they appear on the world scene suddenly.  

If you think about it, we did not know who Vitalik Buterin was, however, we saw many reliable crypto industry veterans backed his idea and got involved with the project.

Bitconnect had no intellectual or upright backers. 

In fact, Vitalik called them out as Ponzi at the outset, albeit, his warnings fell on deaf ears.

  • FREE, Free, freeeeeee!

Free CryptoInvest today to get 50% free.  

Invite your friends and we will give 50% of their investment, for free.  

Share our news on YOUR social feed and we will give you XX for free.  

Email your friends about us and for every single email that gets read, you will get $$.  

The list goes on.  

Whenever you see ‘FREE’ offers to invite more people – it probably is a scam that is preying on greed.  

Run away at once.

Common factors in One Coin and Bitconnect scams

There were some striking resemblances between these two scams.  Look at the below summary table:

Warning signs
BitConnect
Comments
OneCoin
Comments
Affiliate commissions for bringing new investors
Yes
People were paid handsomely for bringing new investors onboard
YesPerpetual commissions were promised to 'shillers'
Tiered structure investment plans
YesPlans ranged from Euro 140 to Eur 55,000 or more
Yes
Interest based on investment amount from $1000 to $100000+
Too good to be true offers
YesSold on the hope of OneCoin reaching Euro 100 one day
YesPromise of interest of over 40% per month
Pyramid scheme
YesMLM combined with cryptocurrency
YesMulti-level referral system from commissions of .5% to 7%
Lack of experts and industry professionals
YesNo known experts were onboard
YesNo known experts were onboard

Why should you not trust influencers?

In the cases of Bitconnect and One Coin, the so called media influencers (bloggers, YouTubers, Twitter celebrities, Facebook groups, etc.,) have all been duped into FOMO and they in turn created a FOMO in their followers.  

It is not clear whether or not these influencers were actually aware of the schematics of the elaborate plan to scam people of their money, nevertheless, they have played a BIG role in people losing their hard earned money.

The entire crypto space is less than 10 years old.  It actually got serious followers in the last 5 or so years.  For someone to claim that they are experts in the field is utterly misleading.  

We have always been telling our readers – never trust anyone on the internet, especially shillers. Do your own research and use the information on the internet to gain multiple perspectives.  

Force yourself to search for the negative point of view when you are in the grips of FOMO.

That one strategy of forcing yourself to search for multiple POVs seems to work excellently from our own experience.

Are you FOMOing?  use our FOMO/FUD checker to find out!

Enjoy.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

best Crypto Tax Software

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

CryptoSpace

Crypto Roundup: All Your YouTube Influencers in One Place

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Crypto Roundup

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: Bitcoin Will Be OVER $20,000 By Christmas 2020! BIGGEST WEALTH SHIFT OF OUR LIFETIME! Cryptocurrency

Date: 19-Nov-20

  • World’s biggest wealth shift of our lifetime is happening right now and no mainstream media is talking about it, except CNBC.

  • Preston Pysh predicted on August 26th that: “Bitcoin should be reaching its all time high by Christmas.”

  • If you are looking to buy a dip, there may not be one.
  • Ricardo Salinas Pliego, a mexican billionaire, has just revealed that 10% of his liquid assets are into bitcoin.

Lark Davis

Video Title: STOCKS HIT NEW HIGHS! WILL COVID VACCINES LEAD TO MEGA PUMP IN 2021? [Are You Ready?]

Date: 19-Nov-2020

  • Stock markets and bitcoin pumps higher on the news of the second successful covid vaccine.
  • There could be more chances for the new stimulus. Means more inflation, more debt and simultaneously pumps stocks, gold and bitcoin.

Crypto Zombie

Video Title: BITCOIN $18.5k TOP!!?! DON’T BE FOOLED!! HODL FOMO BEGINS!!! $TRILLIONS FLOOD!!

Date: 18-Nov-2020

  • Overall sentiment of Bitcoin has changed drastically from ICO craze in 2017 to a time where people are FOMOing to own more bitcoin.

Ivan on tech 

Video Title: BIG WARNING TO ALL HODLERS!!!!!!!!! DO NOT GET REKT!!! BITCOIN $18,500 REJECTED – NOW WHAT?

Date: 18-Nov-2020

  • Ivan expects bitcoin to shoot past $20K resistance before end of this year, giving it 85% probability

Chico Crypto

Video Title: World’s Most Powerful Turn BULLISH on BITCOIN

Date: 19-Nov-2020

  • All those who hold big bags of Bitcoin will come out of the shadows to talk up the Bitcoin rally, a $20K bitcoin could be on the cards before the end of this year
  • Ethereum mining could act as a big catalyst for Ethereum’s price
  • Big companies like google could play a bigger role in mass adoption of crypto

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Lessons from the Veteran HODLERS to the Newbies!

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Lessons in Crypto

For all those who entered the crypto market after the 2017 bull run – here are few lessons from the HODLERS from the last bull run(s).

This is our attempt at making all you newbies aware of the mistakes veteran cryptoers did.

Let’s get started…

Don’t FOMO in to all the hype

FomoIt’s hard not to FOMO in crypto.  The trick is to make sure you don’t lose your shirt in crazy bets.  Always limit your bets to what you are comfortable losing.

The common ways you can become victim of FOMO are:

  • Following your favorite YouTuber without actually doing your own research on the project.
  • Investing into projects at the top.
  • Believing in promises of 100x or 1000x without any substance behind those claims.

HODLing far too long

Remember why you are into crypto – to make the money.

Never fall in love with your crypto, and HODL the tokens even when they are 10x and more.

Have a strategy to take your capital out before you become a HODLer.  

If you believe the project really has what it takes to go beyond 100x and more, just sell in instalments so as to not miss the ride.

One of the best ways to HODL is to take your capital in full and profit in tranches.

This rekt story will give you a right perspective of what it looks like, it’s one of many:

Don’t put all your eggs in one basket

Never go all in on one project. No matter how strong the project may look, even the projects with strong fundamentals don’t do well sometimes. 

And, you will be kicking yourself watching other projects go up and your portfolio just doesn’t seem to make a move.

And don’t over do it and have a portfolio with over 100 projects either. It is very difficult not to have invested in more than 15 projects but anything less than 20 is a good way to go, in our opinion. 

Put aside the share of Profits for Taxes.

One way you can get a good night’s sleep is by paying taxes. 

Always keep a habit of putting aside a % of your profits in USDT or other stable coins, as a reserve to take advantage of market volatility and also to meet your tax obligations. 

Exchanges are more evil during bull run

Foreign ExchangesDon’t trust exchanges. Yes we already know that, but they play more games during bullrun, some intentional and some technical. 

Many exchanges tend to go under maintenance when the prices shoot up too high too soon (Coinbase?), and you can’t sell. 

And the shady exchanges scam out before you know.

Regulators seem interested when the market cap of these projects goes through the roof, which then adds FUD around the project crashing the prices.  

Exchange may freeze funds pending investigations when such issues arise.

Take for example OKEx. Users are unable to withdraw their assets from the exchange for almost a month now, not certain if they ever will, and all that started with the legal dispute.

Never fall for Arbitrage gains

Arbitrage is when you buy in one exchange at a lower rate and sell on the other for a higher rate to take some profits. 

Some shady exchanges show a lot higher prices than the other genuine exchanges and when you deposit your assets to sell at those prices there won’t be actual volume to execute the trade. You may be stuck with either a high fee for withdrawal or other funky rules to take your own money out. 

Remember, there is no free Giveaway

Free CryptoScammers rise with the rising market.  

When the crypto market buzzes with all time highs – scammers cash in big time on newbies.

The most lucrative scam in crypto is ‘Free Giveaway’. Whether it be through YouYube ads or discussion groups and wherever they can get your attention.  Read this article on various sophisticated scams that are being deployed.

We hope these lessons help you through your trades and crypto life.  Stay safe and always DYOR.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

Continue Reading

CryptoSpace

Crypto Roundup: All Your YouTube Influencers in One Place

Published

on

crypto news

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: The United States Just Brought Bitcoin into the National Conversation!! | Cryptocurrency in 2021

Date: 16-Nov-20

  • Former National Treasurer and the new US Senator Elected, Cynthia Lummis, said Bitcoin fits the bill as a good store of value as it is finite and limited, unlike the inflationary fiat currency.

  • Grayscale adds over 7000 more bitcoin in just the last 24 hours.
  • Just over 16% ETH staked for ETH 2.0 launch on Dec 2 2020.
  • Bitcoin Cash hard fork takes place tomorrow.

Crypto Zombie

Video Title: WARNING!!! BITCOIN 2017 BEAR FRACTAL RETURNS!!! BTC WORST CASE SCENARIO…

Date: 14-Nov-2020

  • Institutional money starts flowing into bitcoin.

  • Paypal goes live with its crypto trading platform for eligible customers. They have also raised the buying limits from the initially set $10,000 to $20,000 per week.
  • DIA, an DeFI Oracle provider, integrates with Polkadot.

Ivan on tech 

Video Title: BITCOIN WILL DO SOMETHING INSANE THIS WEEK!!!! -30% DUMP AHEAD vs $20,000 PARTY – Programmer

Date: 16-Nov-2020

  • Bitcoin could make a big move this week, either hit 20K or we may see a 20% to 30% drop
  • Chainlink partners with Etherisc to deliver agricultural insurance in Kenya.

Ellio Trades

Video Title: UNLOCKING $100 TRILLION? This low cap gem seeks to bridge CeFi and DeFi

Date: 15-Nov-2020

  • DeFI could be similar to the ICO craze in 2017
  • Low cap gem: AllianceBlock
  • AllianceBlock is bridging the gap between DeFi and CeFi
  • AllianceBlock Partnership with Orion Protocol and Chainlink.

Chico Crypto

Video Title: WARNING! An “EVIL” Entity Wants Control of BITCOIN…

Date: 15-Nov-2020

https://www.youtube.com/watch?v=45Ac-5y2ofg

  • 90% of Bitcoin’s mining pools are controlled by China based mining pools
  • As the value of bitcoin goes up – there is a threat of push to ‘control’ the network from China
  • Binance is looking to push through the 50% mining share and Chico believes this could be dangerous

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place. 

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

Continue Reading

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