Bitconnect Ponzi Scheme – No Sympathy From Crypto Community

Bitconnect Ponzi Scheme –
No Sympathy From Crypto Community

What looked too good to be true ended up being just that,

as Bitconnect has all but closed its doors. Long accused of being a Ponzi-scheme, Bitconnect shut down its cryptocurrency exchange and lending service this week. As stated on their website, Bitconnect had received cease and desist letters from two American securities regulators – leading to the closure of their lending and exchange platforms. Still, Bitconnect will continue to run its website and wallet service.

Sketchy ‘Ponzi’ offerings

Since its inception in January 2017, many were skeptical about Bitconnect services. In essence, one needed to send Bitconnect Bitcoin in exchange for Bitconnect Coin (BCC) on their exchange. Once you had BCC, you were guaranteed “up to 120 percent return per year.” Users were told they were earning interest by holding their coin “for helping maintain the security of the network.”

Lending platform

Bitconnect’s lending platform is what really led to accusations of a Ponzi scheme, as well as cease and desist orders from regulators. As the above illustration explains, users bought BCC with Bitcoin and then lent out their BCC on the Bitconnect lending software. Users would receive varying percentages of interest depending on the amount of BCC they had lent. Add in the referral system seen in many other Ponzi schemes and the fact that the operation was run anonymously; it's hardly surprising that this whole endeavor has ended in tears.

The lending scheme was the main draw card of Bitconnect because of its huge promise of returns. In order to participate in the scheme, you had to buy BCC – which saw the token hit an all-time high of $437.31 per BCC before it plummeted in value following the closure this week. That being said, the cryptocurrency is still alive and trading at around $35 at the time of writing.

Social media burns Bitconnect

Following Bitconnect’s closure, social media was abuzz with sentiments of ‘I told you so.’ TenX co-founder Julian Hosp highlighted the fact that BCC was still trading as

a real head-scratcher.

Everything that's wrong with crypto in one picture!
— Dr. Julian Hosp

Francis Pouliot shared a hilarious video of a Bitconnect meet which had been slightly

dubbed over.

People invested billions of dollars in this
(This video is actually hilarious recommended for memephiles) 

— Francis Pouliot

American cartoonist Spike Trotman shared one of the most entertaining and eerily accurate predictions back in September 2017, postulating that Bitconnect was indeed a Ponzi scheme. Her latest tweet is a screenshot of the Bitconnect Reddit page, with subreddits for a suicide hotline as well as a massive legal action megathread. Do yourself a favor and take a look at Iron Spike’s full threat on Bitconnect –

it’s brilliant.

The current state of the Bitconnect subreddit is truly a thing to behold.

Rodolfo Novak shared a photo of the monumental collapse in price of Bitconnect from Coinmarketcap, highlight the moment the Ponzi scheme hits

‘exit time.’

This is what a real ponzi looks like at the scam exit time. 

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Bitcoin boom: Prices could triple by year’s end Bespoke analyst predicts

Bitcoin boom:
Prices could triple by year's end,
Bespoke analyst predicts

The bitcoin boom may be far from over.

Bespoke Investment Group's Dan Ciotoli believes the cryptocurrency's price could nearly triple by the end of the year — declaring that the January crash is likely behind it. "There was a big run-up in December, and then we kind of saw these get-rich-quick-investors exiting the space. Everyone rushed in at once. So, the inevitable crash happened," he said Tuesday on CNBC's "Futures Now." "Now it's starting to recover. We saw a bottom around $9,000."

Ciotoli, a blockchain analyst and software engineer, is out with a year-end forecast placing bitcoin prices in the $20,000 to $30,000 range. "The driver I think is going to bring bitcoin up in 2018 is bitcoin denominated commerce," he added — noting that converting it into dollars right now is too pricey. For his bullish forecast to stick, Ciotoli says it depends on the success of the Lightning Network, a technological endeavor that's expected to roll out this year. The network's goal is to bring in a new wave of buyers by making bitcoin transactions faster and cheaper.

If the network fails, Ciotoli says, his year-end bitcoin target could drop as low as $5,000. "If I don't see people actually able to use bitcoin to say 'buy Starbucks' or something. I'd be worried that people would slowly lose interest, the price kind of levels off or even goes down," he said. It would be an unwelcome scenario, but even that wouldn't spell the end of bitcoin, according to Ciotoli. "The technology is here to stay, and I think it'll be interesting to see how things play out over the next year," Ciotoli said.

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Building a Base? Bitcoin Demand at 10K Hints at Move Higher

Building a Base?
Bitcoin Demand at $10K Hints
at Move Higher

Persistent demand around the $10,000 mark appears

to have not only neutralized the immediate bearish outlook on bitcoin, but also hints the cryptocurrency could be building a base for an eventual move higher. Prices on CoinDesk's Bitcoin Price Index (BPI) fell to $9,972.29 yesterday, before witnessing a quick recovery to $11,000 levels. This is the fourth time in last week that bitcoin (BTC) has recovered losses after sinking below $10,000 levels. As of writing, bitcoin is at $10,990 levels. The cryptocurrency has appreciated by 3.38 percent in the last 24 hours, according to OnChainFX. On Coinbase's GDAX exchange, BTC witnessed two-way business yesterday with prices hitting highs and lows of $$11, 370 and $9,945, respectively, before closing (as per UTC) at $10,824 levels.

The situation looks no different today as the rebound from the intraday low of $10,450 seems to have run out of steam above $11,000 levels. The cryptocurrency was last seen changing hands on GDAX at $10,970 levels. The two-way price action witnessed in the last 24 hours is indicative of indecision in the marketplace and a decisive move (in either direction) would likely set the tone for the market. That said, the price chart analysis today puts the odds of a decisive move higher above 50 percent.

A chart (prices as per Coinbase) shows:

  • BTC has consistently found takers at or below $10,000 (marked by circles).
  • On a daily closing basis, bears have been repeatedly failed to push prices below $10,391.02 (50 percent Fibonacci retracement of 2017 low to 2017 high).
  • The previous day's doji candle indicates indecision in the market. Note that the doji candle has appeared following a 44 percent drop from the all-time highs and at critical support ($10,391.02). So it is safer to say that the candle also reflects bearish exhaustion.

Hence, BTC may be likely to see a stronger move higher and establish a bullish short-term bias.

  • A positive close (as per UTC) today, preferably above $11,370 (yesterday's doji candle high), would confirm a bullish doji reversal and open doors for $13,000. A violation there would open up upside towards $15,733 (61.8 percent Fibonacci retracement of December high to January low).
  • On the downside, a close (as per UTC) below $10,391 could yield a sustained move lower to $9,000.

However, while there are signs of green shoots on bitcoin chart, the market capitalization chart of all cryptocurrencies calls for caution.

Total market cap of cryptocurrencies

The market cap chart shows the formation of a head-and-shoulders bearish reversal pattern. A bearish pattern on market cap could be an indication of remaining weakness across the wider cryptocurrency market. Hence, there is merit in being cautious.

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Microsoft Hyperledger UN Join Blockchain Identity Initiative

Microsoft, Hyperledger, UN Join Blockchain Identity Initiative

Tech giant Microsoft and blockchain alliance Hyperledger have joined

blockchain-based digital identity initiative, the ID2020 Alliance. Announced during the World Economic Forum at Davos in Switzerland yesterday, the alliance – which aid agency Mercy Corps and the U.N. International Computing Center have also just joined – aims to improve people's lives through provision of digital identities.

According to a press release, the group is developing solutions with a focus on user's direct ownership and control over their personal data using blockchain technology. At issue is the fact that over 1.1 billion people face not able to prove their identity, and thus struggle to access benefits and services. The situation also gives rise to more serious issues such as human trafficking, according to the World Bank. The initiative has now received a $1 million donation from Microsoft, as well as contributions from entities including Accenture and the Rockefeller Foundation. Accenture, one of the founding member of the initiative, announced a $1 million investment during the ID2020 Alliance summit last summer at New York.

David Treat, MD of the global blockchain practice at Accenture said:

"Decentralized, user-controlled digital identity holds the potential to unlock economic opportunity for refugees and others who are disadvantaged, while concurrently improving the lives of those simply trying to navigate cyberspace securely and privately."

The release explained that digital identity that is user-owned would include government-issued forms of legal identification and allow a seamless authentication process for people and institutions. "We are building an ecosystem of partners committed to working across national and institutional borders to address this challenge at scale," Dakota Gruener, the Executive Director of the ID2020 Alliance, noted. Last June, Microsoft and Accenture unveiled a blockchain prototype for ID2020, that is powered by a private version of the ethereum blockchain.

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Gold Market Mulling Blockchain for 200 Billion of Supply

Gold Market Mulling Blockchain for $200 Billion of Supply

Tech may prevent spread of conflict minerals, money laundering
Bullion joins commodities from oil to tomatoes in ledger push Gold Soars as Crypto Currencies Plunge.. Gold is going digital.

Blockchain technology may help keep track of the roughly $200 billion of the precious metal dug from remote mines, traded by middlemen and melted down by recyclers that’s sold each year to buyers scattered around the world. The London Bullion Market Association, which oversees the world’s biggest spot gold market, will seek proposals including the use of blockchain for tracing the origins of metal, partly to help prevent money laundering, terrorism funding and conflict minerals, according to Sakhila Mirza, an executive board director. “Blockchain cannot be ignored,” Mirza, also general counsel of the LBMA, said in an interview Monday. “Let’s understand how it can help us today, and address the risks that impact the precious metals market.”

Where Gold Ends Up

Jewelry and investment are the biggest sources of gold demand, followed by central banks.Markets in commodities from crude oil to diamonds and even tomatoes are looking at using the digital ledger technology that underpins cryptocurrencies like Bitcoin — known to some as "digital gold" — to track ownership. Tracing gold supply is key to preventing metal that funds armed conflict from entering world markets, identifying owners and maintaining security from mine to vault.

The LBMA has pushed ahead with efforts to modernize a trade that until recent years relied on phone auctions to set a key benchmark price for the market. “For us, it’s a question of where the gold comes from,” Mirza said. The LBMA oversees a list of refiners approved to supply the London market. Its London Good Delivery List sets global standards for large gold and silver bars. The LBMA will also study tagging the metal and using other security features to ensure bars are exactly what they say they are, it said in a statement Tuesday.

“Everything that ends up in an LBMA good-delivery refiner needs to be tracked in the supply chain, regardless of whether it ends up as a large bar in a London vault, a kilo bar shipped to the Far East, or a coin owned by a collector,” Mirza said. “A lot has been done already but it’s still very paper-based. We now want to formalize it through an efficient and possibly technologically based solution.”

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Korean Crypto Exchange Korbit Halting Deposits from Non-Citizens

Korean Crypto Exchange Korbit Halting Deposits from Non-Citizens

South Korean cryptocurrency exchange Korbit has barred non-citizens from depositing local currency – the Korean won – on its platform. Korbit stated in an announcement that its virtual account service will be terminated this month in order to introduce accounts attached to users' identities, as recently ordered by local regulators in a move aimed to calm speculation in the crypto markets, as well as money laundering. As part of that shift, foreign nationals will no longer be able to deposit funds to their accounts.

The firm said:

"If you are not a Korean citizen, the KRW deposit to the domestic virtual currency exchange will be stopped when you switch to the new KRW deposit method in January. [This] applies to both domestic residents and non-residents."

Korbit added that foreigners will not be allowed to deposit Korean won "at any domestic cryptocurrency exchanges" when the new system is implemented. According to reports, the government has previously indicated it would ban non-resident foreigners and minors from trading cryptocurrencies. Early this month, South Korea announced it would begin implementing the new regulations banning anonymous cryptocurrency exchange accounts on or around Jan. 20.

The proposal essentially strengthens know-your-customer (KYC) rules already in existence for exchanges and banks, and will require cryptocurrency exchange users to connect a bank account with identifying information in order to deposit or withdraw funds. Last week, local financial authorities stated that cryptocurrency investors would face fines if they did not switch their virtual accounts to ones with identities attached.

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Bitcoin price plummet sees investors swap cryptocurrency for solid gold

Bitcoin price plummet sees investors swap
cryptocurrency for solid gold

Jumpy bitcoin investors turned to traditionally safe assets such as gold

or register with your social account, would like to receive lunchtime headlines Monday – Friday plus breaking news alerts by email. Anxious bitcoin speculators have sought refuge in gold amid a price plunge in the cryptocurrency. Sales of gold coins surged fivefold last week at Frankfurt-based trader CoinInvest, with phones ringing off the hook and emails pouring in from nervous investors looking to cash out.

CoinInvest director Daniel Marburger told the Standard the surge in demand has continued. "It is a constant flow into gold," he said. Although bitcoin recovered to $11,700 (£8,430) on Monday morning after plunging to $10,000 (£7,187) last week, investors are still nervous, according to Mr Marburger. "Bitcoin could not make a clear counter-trend last week and gold is on a run at the moment with 7 per cent gains since its December lows," he said.

What is Bitcoin?

According to Mr Marburger, speculators are seeking safety from the "crazy volatility" of the cryptocurrency, whose value has collapsed 40 per cent in the past month. "Gold has a sustainable track record over decades and is an asset you actually hold in your hands. People are looking for something to touch rather than an investment where only the belief in it is the value," he said. "Bitcoin has proven one time more than it is based on speculation." Some experts maintained that the cryptocurrency will stabilise in the longer term.

Benjamin Dives, CEO of London Block Exchange, which plans to launch a direct sterling-to-bitcoin exchange, said bitcoin's volatile week was not a cause for concern. "[Some investors] may not be comfortable with the markets moving [downwards] and so are ‘cashing out’ to invest in traditionally stable assets, such as gold," he said. "These people are likely new to cryptocurrency exposure or, as is standard in the investment industry, were just ensuring profits in the short term. The result for cryptocurrencies is a dip in the market, which is natural and healthy."

He added that the exchanges actually prove the cryptocurrency's concrete value. "As the market matures, we can be sure of more stability in the future and that is when these investors will be looking for a re-entry point. Unfortunately for them, their transition to gold may cause them to miss out on the gold rush," he concluded. A year ago, in January 2017, one bitcoin was valued at £900. Many economists remain sceptical about its worth.

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Indian Banks Suspending Bitcoin Exchange Accountsmore

Indian Banks Suspending Bitcoin Exchange Accounts

Bitcoin exchanges are under fire in India,

as many of the nation’s top banks have suspended or greatly curtailed functionality on exchange accounts. State Bank of India (SBI), Axis Bank, HDFC Bank, ICICI Bank and Yes Bank have all taken strong action toward crypto exchanges, either closing accounts or severely limiting functionality. The banks cite the risk of dubious transactions, according to local reports.

The news follows the request of advocate Bivas Chatterjee who recently filed a public interest litigation (PIL) in Calcutta to impose immediate regulations on Bitcoin and other cryptocurrencies. Additionally, the Ministry of Finance referred to Bitcoin as a ponzi scheme before the end of last year. The international mood toward Bitcoin has continued to tighten, particularly with US Treasury secretary Steven Mnuchin stating that the G20 nations will begin working together to make sure that Bitcoin and other cryptocurrencies are properly regulated.

Bitcoin Laundering Less Than One Percent of All Transactions

A recent report from the joint Bitcoin analysis team of FDD and Ellicit,

a Bitcoin forensics company, indicates that less than one percent of all Bitcoin transactions involve money laundering. The report, written to help analyze the flow of funds and the danger of money laundering, has indicated that money laundering isn’t nearly the problem some critics of cryptocurrency believe.

The report states:

“The amount of observed Bitcoin laundering [is] small and darknet marketplaces such as Silk Road and, later, AlphaBay are [generally] the source of almost all of the illicit Bitcoins laundered through conversion services.”

The report also indicates that the vast majority of illicit transactions using Bitcoin were processed in Europe, receiving more than five times as many illicit transactions as North America.

AML processes must improve

The report suggests that the best way to combat such illicit activity is through more stringent anti-money laundering (AML) measures. The report states that the only way to manage the illicit transaction is for “Financial authorities in all jurisdictions [to] increase AML enforcement.”

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Keep Calm And Hodl? CNBC Guest Tells Bitcoin Critic to Piss Off’more

Keep Calm And Hodl? CNBC Guest Tells Bitcoin Critic to ‘Piss Off’

The mainstream media debate over Bitcoin

as a success or failure approached live comedy this week after a “brawl” broke out between guests on a CNBC panel. In an exchange which ended an edition of the network’s increasingly notorious Fast Money segment, regular contributor and RiskReversal.com editor Dan Nathan told Evercore ISI technician Rich Ross to “go piss off” after he criticized Bitcoin’s performance.

Ross had previously maintained that Bitcoin was a poor investment choice in the past few months due to its near-50% fall this week. Traditional stock investments, on the other hand, had allegedly fared better, with Ross giving the example of Boeing’s 200% gains since 2016. As Zerohedge notes, reproducing the unedited version of the exchange, Ross had failed to note Bitcoin’s annual gains of over 1000% in 2017 alone. Nathan labeled him “glib” to deride it. “You’ve been wrong, so don’t say that I’m glib,” Ross retorted before Nathan weighed in with the fateful remark:

“You don't know what I've done, you don't know what my call is, so go piss off, seriously.”

The episode continues Fast Money’s somewhat bizarre approach to Bitcoin reporting. In December, the segment made headlines for suddenly switching allegiances to become extremely bullish on altcoin Bitcoin Cash. At the time, its dedicated Twitter account began publishing material which strongly criticized Bitcoin, telling respondents to “deal with” the rise of Bitcoin Cash instead. That style of content has since not made a return.

Yale Prof. Shiller Thinks Bitcoin’s ‘Bubble’ Could Actually ‘Linger 100 Years

Yale economics professor and Nobel Laureate Robert Shiller has admitted

in an interview with CNBC Thursday, Jan. 18., that he now “doesn’t know what to make of Bitcoin ultimately” after earlier calling it “the best example of a bubble”. In fresh comments Thursday, several months after he told host Brian Kelly it was Bitcoin’s “story”  not its value that had sparked public interest in it, Shiller told reporters “it [Bitcoin] has no value at all unless there is some common consensus that it has value. Other things like gold would at least have some value if people didn't see it as an investment,” repeating a common narrative that investment in Bitcoin is like the 17th-century Tulip Mania. Though he admitted his uncertainty as to what Bitcoin’s fate will be, Shiller overall remains sceptical,

stating:

“[Bitcoin] might totally collapse and be forgotten and I think that's a good likely outcome but it could linger on for a good long time, it could be here in 100 years.”

Bitcoin’s two-day slump this week has partially recovered to challenge $12,000, making it worth over 160 percent more than when Shiller made his previous bubble claims in early September, 2017.

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How to make smart investments in cryptocurrency

How to make smart investments in cryptocurrency

The price of Bitcoin rose over 1000% in 2017,

meaning every $1 invested turned into $1000 in just 12 months. Bitcoin isn’t done yet, and other cryptocurrencies are now seeing similarly rapid growth. This bundle helps you make the most of this remarkable trend, even with a small initial investment. You’ve probably seen on the news recently that the value of Bitcoin has reached an all-time high. But many other digital currencies are expected to see even bigger growth in the coming years. The Complete Cryptocurrency Investment Bundle shows you how to make money from this trend with five in-depth courses. You can get the bundle now for $24 at the PopSci Shop.

The price of Bitcoin rose over 1000 percent in 2017, meaning every $1 invested turned into $1000 in just 12 months. Bitcoin isn’t done yet, and other cryptocurrencies are now seeing similarly rapid growth. This bundle helps you make the most of this remarkable trend, even with a small initial investment. Through concise video lessons, you learn about the underlying blockchain technology and how to purchase your first coins.

The courses also help you assess the market, store your coins securely, and invest in emerging currencies like Ethereum. The final course even shows you how to earn free coins with Steemit. Along with the video courses, the bundle includes an audiobook, meaning you can keep learning on your way to work.

Chuck Reynolds

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