BitConnect: how the promise of "1% a day" fleeced 4,500 people across 95 countries

The project promised what, on paper, sounded like a gift of fate — deposit cryptocurrency and receive roughly 1% profit every day, endlessly. Over two years, a company grew around this promise that raised $2.4 billion from people in 95 countries worldwide. And then, in a single day in January 2018, it all collapsed, and millions of dollars simply evaporated along with the platform.

BitConnect appeared in 2016 as a cryptocurrency "lending" platform: users deposited bitcoins and in return received the platform's own BCC token and a promise of steady daily profit — supposedly thanks to the work of an automated "trading bot" that allegedly traded on market volatility with incredible efficiency. The company actively recruited promoters through a multi-level referral system, and the BCC token itself surged in price for a time, which only reinforced new investors' trust — people saw the chart and treated it as proof that the business was real.

In reality, behind the attractive facade of "automated trading" hid a classic pyramid: no real trading strategy existed that could deliver 1% a day steadily and over the long term — the profits of earlier participants were paid from the contributions of new ones. When the inflow of new money began to slow, and regulators in several U.S. states (including Texas and North Carolina) issued cease-and-desist orders, the structure lost its stability.

In January 2018, BitConnect announced the closure of its lending program. The BCC token instantly crashed by roughly 92% of its value, leaving tens of thousands of investors with practically nothing. Investigators estimated that around 4,500 people in 95 countries worldwide were affected.

The platform's founder, Satish Kumbhani, was charged in absentia by the U.S. Department of Justice in February 2022 for orchestrating the fraudulent scheme, but he remains a fugitive and his whereabouts are unknown. BitConnect's chief promoter in the U.S., Glenn Arcaro, pleaded guilty and received a sentence of 38 months in prison, along with an obligation to pay victims restitution of $17,646,801.

Published 26 July 2022