Charles Wildes et al v. Bitconnect International PLC et al (2018) -

[Null]

In short, due to the centralized nature of the BitConnect currency, they are suing for fraud, claiming that BCC operated as an unlicensed security instead of a cryptocurrency.

Attached is the complaint.

 

[Pope Negro Joe the XIIIth]

"The power of magicbux is that it's not controlled by financial regulations and laws that prevent growth!"

...

"I'm suing you for not following financial regulations with my magicbux!!!"

:autism:

Also, what is "instead of a cryptocurrency" supposed to mean? As far as I can tell, this is exactly how cryptocurrency is meant to work.

 

[AnOminous]

Also, what is "instead of a cryptocurrency" supposed to mean? As far as I can tell, this is exactly how cryptocurrency is meant to work.

No, this is more like an unlicensed futures contract. In this case, a particularly illegal kind called a Ponzi scam that is illegal whether you do it with dollars, doughnuts, chickens, or magic Internet money.

 

[Pope Negro Joe the XIIIth]

Ponzi scam

Work with me here, I'm an apostate who doesn't have tickets to Satoshi's magical ship. I fail to see how most [w/e]coin exchanges haven't turned out to be Ponzi schemes in the end, as it seems like the big story in coins is always about a bunch of degenerate gamblers losing their kids college funds over some sort of obvious scam.

Are they coins themselves technically stable? I don't know enough about the technology to say. It just seems that almost everyone involved at the higher levels of this stuff is up to some shady shit to me.

 

[AnOminous]

Work with me here, I'm an apostate who doesn't have tickets to Satoshi's magical ship. I fail to see how most [w/e]coin exchanges haven't turned out to be Ponzi schemes in the end, as it seems like the big story in coins is always about a bunch of degenerate gamblers losing their kids college funds over some sort of obvious scam.

The unregulated ones mostly have, either outright scams like MtGox to just incompetently run operations, which are most of the rest.

They generally don't let you hook up your scam to the banking system via ACH, so these are most trustworthy.

This doesn't mean exchanges can't be used, but never leave money on them.

Also day trading and speculation in general is for either geniuses or degenerate retards. And even the geniuses lose sometimes.

 

[Null]

Work with me here, I'm an apostate who doesn't have tickets to Satoshi's magical ship. I fail to see how most [w/e]coin exchanges haven't turned out to be Ponzi schemes in the end, as it seems like the big story in coins is always about a bunch of degenerate gamblers losing their kids college funds over some sort of obvious scam.

Okay. I have 5 Kiwi Coins. You have $5. I agree to transact 5 KWC to your wallet for $5 cash. This is a purchase.

Kiwi Coin itself is a large and diverse ecosystem. There are tens of thousands of people transacting Kiwi Coin, using GPU/CPU miners to produce more Kiwi Coin in the well-established, understood, publicly documented blockchain system it uses. No one owns Kiwi Coin; it is a shared idea/delusion/wet dream that is collectively made up by the tens of thousands of people who support that underlying system of mathematical constants.


BitConnect was not like that. BitConnect was centralized. They owned the computers that produced BCC, and at any time they could press a button to print eleven trillion more. BitConnect's central organizations promoted BCC as a cryptocurrency investment. If you hold BCC, every day, you will be given 1% more BCC in compounding interest. To back up the value of BCC, they would have a "reserve" of other valuable cryptos. You could buy it with either cash or Bitcoin (BTC). They would then hold that valuable currency and, by their marketing page, use proprietary artificial intelligence to engage in Bitcoin/Altcoin daytrading with that money to get super fucking loaded and inflate the value of their currency.

So here's the major points:

• BitConnect was different from almost all other cryptos in that it was centralized with a direct ownership and control belonging to the organization.
• BitConnect's value was not intended to be directly derived from people's willingness to seek it out and use it for commercial goods; it was intended to be held as an investment.
• BitConnect attempted to persuade people it was not in fact a Ponzi scheme by informing buyers they would continually back up the purchasing power by using literal fucking computer magic.
• BitConnect was heavily promoted by either useful idiots or direct underlings of the corporations, named independently, which in fact was the only thing giving the currency any demand or value what so ever.
  
• hey hey hey wassu wassu wassu bit kooooo neeeeeeeeeeeeeeeeeeeee

I want to further describe the difference between the BCC ROI and another form of Cryptocurrency ROI to hammer home the point.

In Cryptocurrency, the reason why you mine a crypto is to fulfill transactions. In crypto, in order to determine if a person can send money, they must validate both the authorization of the transaction and the legitimacy of it. Both the request must be signed by the private key of the wallet, and the funds must exist. They do this by checking the history of the entire blockchain and determining the sum of the wallet's history of transactions to see if it has that money. This math isn't too complicated, but it is somewhat resource consuming. Nothing would stop bad actors from just lying and making a bunch of nodes, however, so to artificially inflate the requirements of verifying transactions, you must provide proof-of-work by mining along with your validation of the transaction. This means that in order to lie to the network, you must effectively be doing 51% of all the network's proof-of-work to get away with that lie. To reward people for doing this, you stand a chance to win a reward from the network.

BitConnect, again, did not have that. It was centralized. The only thing validating TX in BitConnect was BitConnect's organization.

Compare this to a different form of validation: Masternodes. Masternodes forsake high proof-of-work requirements, meaning running a node on the network for validation is only the requirements of validating the blockchain itself (much, much less significant). To stop people from forging transactions, however, Masternodes are required to stake collateral which is locked until the Masternode is taken down. So in short, you put up 1000 of a coin into a Masternode, lock it, and as long as you're validating transactions you're entered into a lottery to win a reward for the network. Masternode systems are more like a Republican government whereas Mining is more like Direct Democracy government.

BitConnect, again, had nothing of the sort. Your 1000 coins you'd use as stake collateral were instead sitting idly in your wallet just making magic money gains from the heavily centralized Despot government.


Hopefully this outlines how, at its core, BitConnect was barely even a cryptocurrency and was more like trading in Neopoints or Runescape Gold.

 

[Pope Negro Joe the XIIIth]

BitConnect was centralized. They owned the computers that produced BCC, and at any time they could press a button to print eleven trillion more.

Oh fuck, that part must've gone over my head.

Wow, okay. That's a pretty clear delineation between the two in that case. Now all I'm stuck wondering is who thought giving their money to that was a good idea.

 

[Null]

Now all I'm stuck wondering is who thought giving their money to that was a good idea.

 

[AnOminous]

Hopefully this outlines how, at its core, BitConnect was barely even a cryptocurrency and was more like trading in Neopoints or Runescape Gold.

Speculating in those, you at least know you're dealing in outright funny money that is literally worth nothing and could be obliterated instantly.

What makes this particularly illegal (and what is ALWAYS an indicator of an outright scam EVERY time) is stuff like promising interest on a per day basis, like 1% or even absurdly high annual rates. This is a universal rule almost on the level of a law of nature, so if you wouldn't trust someone telling you that they had a perpetual motion machine, you shouldn't believe this either.

On one level, anyone stupid enough to fall for a Ponzi scam deserves it.

On another, though, you can't simply allow these things to flourish. They are incredibly destructive, even to the people who aren't idiots, because they can entirely wreck an economy. There are just that many stupid people. For instance, a plague of Ponzi scams literally nuked the entire national economy of Albania. This fucked everyone, not just the idiots in the scams.

If there is an economic crime that deserves death penalty, it is Ponzi scams.

 

[ColtWalker1847]

People who video in portrait mode deserve everything bad that happens to them.

 

[Pope Negro Joe the XIIIth]

What makes this particularly illegal (and what is ALWAYS an indicator of an outright scam EVERY time) is stuff like promising interest on a per day basis, like 1% or even absurdly high annual rates. This is a universal rule almost on the level of a law of nature, so if you wouldn't trust someone telling you that they had a perpetual motion machine, you shouldn't believe this either.

I'd add them taking your actual money and turning into some kind of internal funbux that do nothing, barring vague promises of "integration with vendors soon."

That's another sure sign you're being played imo.

 

[Marvin]

This is a universal rule almost on the level of a law of nature, so if you wouldn't trust someone telling you that they had a perpetual motion machine, you shouldn't believe this either.

In line with the crypto theme, guaranteed file compression is another popular claim for scammers.

 

[mindlessobserver]

LOTS OF WORDS

Hopefully this outlines how, at its core, BitConnect was barely even a cryptocurrency and was more like trading in Neopoints or Runescape Gold.

It actually sounds worse then that. As any good Chinese gold farmer will tell you, Neopoints and MMO gold actually DO have understood value that people are willing to back with real money. Furthermore, while any MMO company could in theory print infinite in game currency, they don't. As this would break the in game economy. A game that has serious real word monetary value beyond just its in game currency. Hell, take guild wars 2. That game has a team of economists whose job it is to insure market stability between real life dollars, in game currencies and the overall items on said market. GW2's admins also don't engage in investment speculation with their in game currency. In that respect, Game Gold is backed by the full faith and fun of the game.

From the sound of things, these people were selling something that did not have any value to anyone. Even them.

 

[Orc Girls Make Due]

It actually sounds worse then that. As any good Chinese gold farmer will tell you, Neopoints and MMO gold actually DO have understood value that people are willing to back with real money. Furthermore, while any MMO company could in theory print infinite in game currency, they don't. As this would break the in game economy. A game that has serious real word monetary value beyond just its in game currency. Hell, take guild wars 2. That game has a team of economists whose job it is to insure market stability between real life dollars, in game currencies and the overall items on said market. GW2's admins also don't engage in investment speculation with their in game currency. In that respect, Game Gold is backed by the full faith and fun of the game.

From the sound of things, these people were selling something that did not have any value to anyone. Even them.

This theoretical change can be seen on a bigger MMO such as World of Warcraft now with their trade of "WoW tokens" their value on the market in-game across different regional servers and their real world value in battle.net currency (which converts back to real money to spend in their store.)

 

[Bryan Dunn]

In short, due to the centralized nature of the BitConnect currency, they are suing for fraud, claiming that BCC operated as an unlicensed security instead of a cryptocurrency.

Attached is the complaint.

UPDATE: even more lolsuits incoming for BCC ponzie scheme. Looks like between this and Maddox v. Dick, we got ourselves a shitshow

 

[Faggotron]

New Zealand Mosque Shooter's Mention Of BitConnect Could Setback Bitcoin Acceptance

The suspected New Zealand Mosque shooter claimed, in his rambling, nonsensical, so-called manifesto he made money investing in bitcoin-related cryptocurrency Ponzi scheme BitConnect...

www.forbes.com

thought it might be worth mentioning that the christchurch dickhead made the money to fund his operations via

bitconeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee

 

[Крыса]

New Zealand Mosque Shooter's Mention Of BitConnect Could Setback Bitcoin Acceptance

The suspected New Zealand Mosque shooter claimed, in his rambling, nonsensical, so-called manifesto he made money investing in bitcoin-related cryptocurrency Ponzi scheme BitConnect...

www.forbes.com

thought it might be worth mentioning that the christchurch dickhead made the money to fund his operations via

bitconeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee

Has there been anything actually backing that claim ? 'cause Brenton said a loooot of random shit.

 

[AnOminous]

Has there been anything actually backing that claim ? 'cause Brenton said a loooot of random shit.

Also everything he said was a meme, and you don't get more memey than cryptocurrency Ponzi schemes.

 

[Faggotron]

Also everything he said was a meme, and you don't get more memey than cryptocurrency Ponzi schemes.

i dont think its fair to say EVERYTHING was for the lulz, the manifesto is at a pretty somber and normy state at the point he says that, most of the other stuff from the "who am i" section has been confirmed in some fashion by his other activities online

but no, we dont have any evidence of his investments, mostly because bitconnect is a corpse who cant tell lates yknow?

i am finding reports of multiple crypto crimes around mid january centered in christchurch