Regulatory action

BitConnect Ponzi

A 'lending platform' promising 1% daily returns via a proprietary trading bot. Collapsed in January 2018 after multiple state regulators issued cease-and-desist orders.

Losses

$2.6B

Affected

~1,500,000

Started

Jan 2016

Collapsed

Jan 2018

Timeline

2016: BitConnect launches, offering 1% daily returns on deposits

2017: Token BCC reaches $500+ peak market cap ~$2.5B. Enormous YouTube promotion network

January 3, 2018: Texas State Securities Board issues cease-and-desist

January 16, 2018: BitConnect announces platform shutdown. Token collapses 97% in hours

2021: SEC charges BitConnect founders; promoter Glenn Arcaro pleads guilty

2022: Founder Satish Kumbhani indicted, remains at large in India

Evidence

Verified via: SEC vs BitConnect (2021), DOJ indictment of Kumbhani (2022), pleadings in Texas/NC/NJ securities actions, extensive on-chain analysis of token holder concentration.

Lessons for you

Fixed high yields (1%/day) are mathematically impossible as legitimate returns; they require new investor money to pay old investors
Trading bots promising steady daily returns have never existed as a sustainable business
Aggressive YouTube/affiliate promotion is a major warning sign
If you cannot explain where the yield comes from in one sentence, there is no yield