Prominent anti-malware tool Malwarebytes recently added BitConnect.co, BitConnect’s official website, to its list of blocked websites. When users inquired staff about the blockade, they were told that the website has a “very poor reputation” and that users are advised to stay away from it.
On Reddit, various users celebrated the move and shared screenshots of what they got when attempting to access the website. BitConnect is widely believed to be a Ponzi scheme that will one day lead to a loss of funds.
Malwarebytes is known for actively protecting its users against websites with a poor reputation. Recently, Core Media pointed to the tool as an effective one to use to remove CryptoShuffler malware, which hijacks cryptocurrency addresses copied to clipboards and switches them to the attackers’ address.
Others have also recently attempted to protect users against BitConnect. A Twitter account associated with the cryptocurrency Dash (DASH) recently tweeted at CoinMarketCap, asking the cryptocurrency index to remove BitConnectCoin (BCC), BitConnect’s cryptocurrency, from it.
— DASH (@Dashpay) 6 November 2017
What is BitConnect?
BitConnect is a platform that promises investors high returns, of about 1% a day, through a supposed trading bot they created. Those who invest more are promised higher returns, as according to the website those who put over $10,000 of their own money will earn “volatility software interest” plus a 0.25% guaranteed daily bonus. These returns, as most users point out, are unsustainable.
The website is paired with a cryptocurrency that users need to purchase with their money to lend and earn interest. The cryptocurrency, BitConnectCoin, is currently trading at $267 and has a $573 million market cap, according to data from Cryptocompare.
Besides its promised returns, users also believe BitConnect is essentially a Ponzi scheme due to its cryptocurrency mostly being traded on its own exchange. At press time, its BCC Exchange had an $18 million trading volume on the BCC/BTC currency pair, while the second biggest exchange trading the cryptocurrency, Livecoin, has a $480,000 volume on the same pair.
Ethereum creator Vitalik Buterin, when questioned about BitConnect by Ponzi Crypto Coins, also pointed out it’s likely a Ponzi scheme:
Yeah, if 1%/day is what they offer then that’s a ponzi.
— Vitalik Buterin (@VitalikButerin) 2 November 2017
Although it isn’t clear who created BitConnect, it is generally believed that the cryptocurrency survives because new users keep on investing in it. Once investments slow down and its creators aren’t able to pay users back, the website will presumably be shut down.
Finally, it is unclear what BitConnectCoin is actually used for, other than lending to the platform’s supposed trading bot. A few popular YouTubers and content creators actively promote the cryptocurrency in an attempt to earn more using BitConnect’s referral system. They claim that the cryptocurrency’s value is pegged to that of Bitcoin, as both cryptocurrencies surged in value this year.
Core Media reached out to two BitConnect-promoting YouTubers, but neither was immediately available. We will update the piece if we hear back from them.