BitConnect, the biggest Ponzi pyramid of all time?

in #bitconnect2 years ago

The author is an independent contributor, consultant in the field of blockchain and cryptocurrencies.

First of all, thank you to everyone who helped with the realization of this article, be they pro-BitConnect, anti-BitConnect or without notice on the subject.

You've probably heard of BitConnect:

or because you saw him land in the top 10 capitalizations (7th November 3, before moving to the 15th place at the time of writing these lines because Coinmarketcap no longer takes into account the tokens Bitconnect that are stuck on the lending platform

because someone told you about it:

in good and gave you his affiliate link to get a substantial commission

struggling in explaining to you that it's the biggest Ponzi pyramid of all time

or because you saw the Hasheur video, released on November 1, denouncing BitConnect as a scam.

We will try to clarify the situation while remaining pragmatic and objective by sticking to the facts and citing the sources.

What is a Ponzi pyramid?

First, a quick explanation of what a Ponzi pyramid is. It's a scam that was first set up in 1919 by a so-called Ponzi who miraculously gave miraculous income to his underwriters. In fact, he used the inputs of the new entrants to pay the incomes of the older ones.

Each subscriber received additional interest if he sponsored new entrants, which encouraged affiliation and naturally increased the number of subscribers. Each new subscriber doing the same, hence the pyramid system.

This system works as long as there are enough new entrants to pay the interest of others and as long as the number of subscribers withdrawing their investment remains limited.

Bernard Madoff is known to have achieved the largest and most enduring Ponzi scheme in history. He created his investment company in 1960 and was very late in his investments and the interests he provided to his clients. His company has even been one of the 5 most active companies in the development of NASDAQ. He was even the president between 1990 and 1993! But, at the end of 2008, during the subprime economic crisis, some clients wanted to withdraw their funds, causing its Ponzi pyramid to collapse. In December 2008, he was facing withdrawals of $ 7 billion, while he had only a billion in the bank.

How does Bitconnect work?

Let's look at how BitConnect works explained on this page.

  • you buy Bitcoins
  • with these Bitcoins, you buy BitConnect tokens (you can do this on multiple platforms, but more than 90% of the exchanges are done on their platform)
  • You block your BitConnect tokens between 120 and 299 days (depending on the amount invested). This placement is done only on their platform. Important note: you block the value of your BitConnect in dollars and not in BitConnect chips

  • Based on the graph below of daily income, you therefore receive on average about 1% per day of your starting bet.

  • At the end of the blocking period, you can recover a BitConnect token number equal to the original dollar value.

Do not you think there is a problem?

Calculating the profitability of Bitconnect

We will do a small calculation with the sum of $ 2000 over the period from March 5, 2017 to November 5, 2017 because:

  • March 5th is when the BitConnect price has started to take off
  • November 5 (8 months later or 240 days) is the end of the lock-up period for the range of $ 1010 to $ 5000

Let's make our calculation:

Course on March 5, 2017

  • 1 BitConnect = $ 0.8661 = 0.00069123 BTC
  • 1 BTC = $ 1262

Course as of November 5, 2017

  • 1 BitConnect = $ 279.87 = 0.0375221 BTC
  • 1 BTC = $ 7598

Let's calculate the added value of a BTC investment:

  • March 5th, you buy for $ 2000 of BTC, that makes you 1.5847 BTC (2000/1262)
  • On November 5th, your 1.5847 btc is worth $ 12040 (1.5847 * 7598)
  • Added value: $ 10,040 (12040 - 2000)

Let's now calculate the added value of an investment in BitConnect:

  • March 5th, you buy for $ 2000 of BTC, that makes you 1.5847 BTC (2000/1262)
  • You exchange these 1.5847 BTC against 2292 BitConnect (1.5847 / 0.00069123)
  • You are banking out your 2292 BitConnect at their market value of $ 1985 (2292 * 0.8661)
  • Taking an average daily income of 1%, you earn $ 19.85 a day
  • After 8 months, you got $ 4764 (19.85 * 30 days * 8 months)
  • You withdraw your 1985 euros in lending as they are now unlocked
  • During the 5th of November, with your 1985 euros, you get 7.09 BitConnect (1985 / 279.87)
  • You exchange these 7.09 BitConnect in Bitcoin and you get 0.266 Bitcoin (7.09 * 0.0375221)
  • You convert your 0.266 Bitcoin to dollars: $ 2021 (0.266 * 7598)
  • Total (salvage and interest): $ 6785 (2021 + 4764)
  • Added value: $ 4785 (6785 - 2000).

So over the period from March 5, 2017 to November 5, 2017:

  • you place $ 2000 in Bitcoin, you make $ 10 040 of added value
  • you place $ 2000 in BitConnect, you make $ 4,785 in value.

By leaving your money in Bitcoin, you would have made twice as much value as converting it to BitConnect.

Anecdote, the average daily income is about 1%, or 7% per week. The first cryptocurrency Ponzi scheme, Bitcoin Savings & Trust, launched in November 2011 and defaulted in August 2012, also promised a return of 7% per week ...

The Bitconnect ICO

The whitepaper

Turning now to the Bitconnect ICO, here is the post on

You do not find that something is missing? What is the first thing we study in an ICO?

There is no White Paper. Look for him on the Internet, he can not be found. If anyone finds it, please put the link in the comments.

The source code

Now let's take a look at the BitConnect GitHub account.

It contains neither more nor less than the open source code of Bitcoin. The only codes added by BitConnect are the different wallets and mining scripts.

If we study well the page of the ICO Bitconnect, the site, the platform of exchange and the page Github, one realizes that the BitConnect has no technological added value compared to Bitcoin. The only content you will find is how to increase your capital: by sponsoring new entrants! The basic principle of Ponzi schemes.

The team

Another important element, no information on the team or the legal entity (company, foundation, association ...) at the head of BitConnect is mentioned on the various sites.

When searching the web, you can find two identities that are supposed to be part of the BitConnect team:

  • Joshua Jeppesen, who is billed as BitConnect's director of development, is expected to attend the Blockchain Expo on November 30. The problem is that when we look for information on this Joshua Jeppesen, we can not find anyone related to a developer or BitConnect ...If we take the picture of this person and we enter it in Google Images, no page appears except that of the Blockchain Expo ... This man seems completely fictitious, but imagine that we will have more information about him during the conference …
  • A Ken Fitzsimmons, British citizen, born in June 1978, created a company "BITCONNECT LTD" on July 14, 2016, 4 months before the BitConnect ICO. The documents, relating to the establishment of this company, indicate an address in Asfhord in England and that it was dissolved on July 11, 2017.

Similarly, if we search for information on this mysterious Ken Fitzsimmons, nothing related to BitConnect is found except these documents.

It is therefore impossible to know who is the creator of BitConnect. If we study all serious crypto-currencies, we can find who is their founder and the team that manages them. Some will say that we do not know the true identity of the creator of Bitcoin. We do not know exactly who Satoshi Nakamoto is, but we know that it was this person or group of people who created Bitcoin, who wrote the Bitcoin White Paper, his account was active several years on and he exchanged emails with several members of the Bitcoin Foundation like Gavin Andresen.

In the case of BitConnect, nothing, nobody. All the people you find easily associated with BitConnect are people who promote BitConnect, taking care to give their affiliate link.

Bitconnect sites

Let's also analyze the information regarding the three domain names (,, and SSL certificates:

At the Whois domain name registry, no information, everything is anonymous.

For SSL certificates of and, these are Let's Encrypt, certificates where the identity of the requester is not required. In this case, no information is present.

For, as the platform must have been the victim of denial of service attacks, it is behind the CloudFare anti-DDoS service that carries the SSL certificate. So the same here, no information about the BitConnect entity.

Let's take a look at those who promote BitConnect. This post shows that several affiliates have already promoted previous Ponzi schemes.


Turning now to the annual BitConnect ceremony, which was held with great fanfare on October 28, 2017 in Pattaya, Thailand.

You can watch the full video of the conference (6:50 anyway), but here are some selected extracts:

  • around 3:40, you will see sports cars (Lamborghini, Aston Martin ...) that have been offered to the best affiliators
  • around 5:47, they present the novelty, December 1, you can spend your BitConnect chips with a MasterCard. A minute later, at 5:48, they have fun with a giant fake card labeled VISA, but this does not seem to shock anyone ...

Add to this the venue of the conference, Pattaya, known for its sandy beaches and galloping prostitution.

It does not remind you of anything? Sports cars ... prostitution ... the best affiliator contest ... yes, that's it! The Wolf of Wall Street, film with Leonardo Di Caprio, movie inspired by the life of Jordan Belfort, convicted of fraud after setting up an investment company.

They talk about Bitconnect

  • Let's take a look at famous people and entities in the cryptocurrency community who gave their opinion on BitConnect:

  • @CryptoHustle, an influential crypto trader with over 30,000 followers, asks not to promote Ponzi schemes like BitConnect, otherwise he feels you seriously lack ethics

  • @Crypto_God, another influential crypto trader with more than 53,000 followers, says BitConnect is an obvious Ponzi pyramid and does not touch it

  • Peter Brandt, a famous trader since 1980 with more than 73,000 followers, agrees that BitConnect is a scam

  • and the best for last, Vitalik Buterin, the creator of Ethereum, who says that an entity that offers you a return of 1% every day is necessarily a Ponzi scheme.

BitConnect, a revolutionary Ponzi scheme?

Now that we have put forward all the arguments that show that BitConnect is a Ponzi scheme, one wonders if BitConnect is not a revolutionary Ponzi scheme that can never go bankrupt:

  • several platforms (Novaexchange, CoinExchange, HitBTC) allow to exchange the BitConnect. Maybe they have information that could reassure us? But then what would be the criteria? Otherwise, we could question the listing of these platforms.
  • with its insolent growth, one wonders if they have not found the "trick" to ensure their sustainability. For this, on this page, it is indicated that a trading bot makes your money grow.But no system can offer an income of 1% per day indefinitely. We do not find any specific information on this supposed trading bot.

Many people have already demonstrated that this daily income of 1% was not tenable in time, you can judge on piece:

this video from Cryptocurrency Investments

this post on steemit of the same person

this Steve Dell post

this video of Sunny Decree

this video of David Hay

this video from Crypto Investors


In summary, if we stick to the facts:

  • no white paper from BitConnect
  • BitConnect's Github account is empty of any added value compared to Bitcoin
  • no information about the founder or any member of the development team
  • over the same period, your added value in Bitcoin is 2 times higher than that of BitConnect
  • the system is based on the affiliation of new entrants by the subscribers, the main characteristic of the Ponzi pyramids.

We are facing the biggest application of the Ponzi scheme to the sphere of cryptocurrencies. It may not be the biggest of all times (Madoff has managed up to $ 17 billion in assets), but it will certainly be the one that has affected the largest number of people around the world.

Now, there are two issues to BitConnect:

  • Creators could fly into the wild with all the bitcoins accumulated when subscribers purchase BitConnect tokens when the Ponzi scheme collapses:
  1. Either when the number of new entrants will eventually be insufficient to pay the subscribers' interest
  2. Either because too many subscribers will want to convert their BitConnect to Bitcoin tokens
  • Either the FBI will shut down BitConnect for scam. It seems they are already on the record.

After Silk Road and BTC-e, the wallets of the FBI will still grow ...


Solid info, brother! Only variable is that we can never know how much Bitcoin would have gone up in value since March so it's a gamble and all of crypto is gamble. But on the other hand, I do agree this is setup like a pyramid and solves no real world issues. I have a little bit of money in it but never all your eggs in one basket. I've got my investments in all kinds of crypto ROI's but if one goes down, I've got the other 9 to back it up. :) Keep up the solid work!