Bitstrade: Another Scam Busted for Aggressively Pushing Investment Opportunities
The world of cryptocurrencies certainly offers opportunities for high returns, at least for those with a good sense of risk and timing. But when a project promises certain returns, and aggressively pushes its investment approach, the US authorities usually intervene.
State authorities have busted three pyramid schemes, starting with BitConnect, and the more recent exit scam of Davor Coin. The latest in the list is Bitstrade, receiving a Cease and Desist order from New Jersey regulators.
The platform, also going as Bitstrades, uses the BSS token to offer lending and rewards. But the selling of the token by unlicensed individuals is seen as a securities fraud.
At this point, the authorities have intervened even before BitsTrades gained higher visibility:
> Hello, @CoinMarketCap Our coin Listing is in pending status, will you have look into the matter? Ticket id #19250— Bitstrades (@BITSTrades) February 5, 2018
Hello, @CoinMarketCap Our coin Listing is in pending status, will you have look into the matter? Ticket id #19250
Not even listed on CoinMarketCap, the BSS token may not even manage to build a pyramid base. The latest event shows that timely regulation on the tails of the BitConnect failure has stopped similar schemes in their tracks. The Bitstrades platform does not even have a wider social media presence.
The End of Lending Schemes?
At this point, lending schemes have already lost the seemingly endless climb in Bitcoin's price. With the asset sliding and hovering below $9,000, no platform would be secure in the knowledge that it could pay out even for a few months. And while BitConnect lasted for about a year, Davor Coin unraveled much faster once Bitcoin lost more than 65% of its value.
Even seemingly smart investors, who hoped to get in and out quickly, may not manage to withdraw their funds, as the teams now lock away the coins and balances.
Some projects have become aware that the "crypto lending" label has become tainted:
> Thorncoin is re-branding from a lending scam into a staking scam. Do not join this platform.pic.twitter.com/F7iqcj77Ss— Madoff wasn't on the blockchain (@bccponzi) February 9, 2018
Thorncoin is re-branding from a lending scam into a staking scam. Do not join this platform.pic.twitter.com/F7iqcj77Ss
However, "staking" the coins may also have a disproportionate return rate, which does not depend on the technology, but on newcomers buying into the project.
Thorncoin was yet another token scheme not listed among regular digital assets. In this case, restrictions have already applied, and the Thorncoin scheme is not available in the European Union.
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