BitConnect

Failure type: Fraud
Date: January 2018
Reported loss: ~$2.4B taken from investors (figure cited by the US Department of Justice)

What happened

BitConnect invited users to exchange bitcoin for its own token and lock it in a lending programme that promised steady returns, said to be generated by a proprietary trading bot nobody outside the company could inspect. A multi-level referral structure paid existing participants to recruit new ones. After state securities regulators in the United States issued cease-and-desist orders, the lending platform was shut down in January 2018 and the token's value collapsed. US authorities later charged the operation as a fraud: a promoter pleaded guilty, and the founder was indicted and reported as a fugitive.

What to take from it

A fixed or guaranteed return in crypto is a claim about the future that nobody can make honestly. When the strategy behind it cannot be inspected and recruitment is rewarded, the returns are being paid by later deposits — which is a structure, not a market view, and it ends when deposits slow.

Dates and figures are widely reported public estimates from coverage at the time, not KripZen's own audited data.

Where it sits on the record

The documented exchange failures we track, in the order they happened.