Bitconnect Investigation: FBI Seeks For The Victims

TL: DR;

• FBI seeking information from victims of the Bitconnect Ponzi Scheme
• Questions being asked by the FBI seem to suggest an interest in identifying those who promoted Bitconnect via Youtube or other marketing channels to unsuspecting investors.

BitConnect was a cryptocurrency that became famous for developing a major Ponzi scheme that netted the coin (BCC) a market cap of $2.5 billion in the peak of December 2017.

The company’s value proposition was that users would receive up to 10% return on their investment each month. Bitconnect claimed to use a tiered-investment strategy that was based on the total amount of funds an investor initially deposited.

BCC reached the price of $463 at its all-time high, before plunging by 65% on January 3^rd, 2018, down to $5 by the end of January. Bitconnect attempted to repay all investors for $363 per BCC, but by the time the investors received the coins, the price had already gone well below $10, making their refunds practically worthless.

That same month, after a cease order, was issued by regulators in Texas and North Carolina, Bitconnect announced that they would be shutting down their exchange and lending operations. Shortly after, the company’s assets where frozen and the founders are currently under investigation (the alleged head of Bitconnect, Divyesh Darji, was recently arrested for his role in the scam).

FBI Seeks information from Victims

With dozens of lawsuits filed against the company, the FBI has taken on the task of investigating the crimes committed and announced that it is seeking information about those who may have lost their money by the Ponzi scheme.

As is stated in the FBI’s announcement:

“If you invested in Bitconnect, please complete a brief questionnaire at http://www.fbi.gov/resources/victim-services/seeking-victim-information/seeking-victims-in-bitconnect-investigation. Your responses are voluntary and would be useful in the federal assessment of this matter and to identify you as a BCC investor and potential victim. Based on the responses provided, you may be contacted by the FBI and asked to provide additional information.”

The questionnaire includes such questions as:

• Where did you first hear about Bitconnect? (Friend, Youtube, Event, Other)
• How much money did you invest in Bitconnect?
• What was the username associated with your Bitconnect account?
• Who referred you to Bitconnect (if applicable)?

Based on the type of questions being asked, it seems like the FBI is searching for anyone who may have had a hand in promoting Bitconnect, possibly to prosecute them for their role in enhancing the Ponzi scheme.

Conclusion

It’ll be interesting to see if any of the investors will be able to recover their lost funds. Although Ponzi schemes have been around for decades, they always seem to find new ways to emerge and trick unsophisticated investors into pouring money into them.

Ultimately, we can only hope that those who lost money learned the most important lesson from experience; which is that if an investment opportunity sounds too good to be true, it probably isn’t true.