BitConnect Class Action Lawsuit Adds YouTube As Defendant, Slams “Negligent” Behavior

  • YouTube was added as a defendant on a class action lawsuit against BitConnect.
  • Documents show the Google-owned platform was slammed for allowing promoters to reach thousands of investors on it.

Google-owned video sharing platform YouTube has recently been added as a defendant in a class action lawsuit filed against BitConnect, a company that allegedly ran a cryptocurrency-related Ponzi scheme that “illogically promised” investors huge returns.

According to publicly available documents filed with the Southern District Court of Florida, YouTube failed to protect its users from BitConnect-promoting content, by not delisting and demonetizing videos about it.

This exposed “countless” of its users to the Ponzi scheme. Per reports, the scheme’s promoters posted over 70,000 hours of BitConnect-related content on YouTube, which received over 58 million views. Despite the attention, and the creation of videos attempting to expose BitConnect as a scam, its affiliates thrived on the platform.

The document reads:

In short, aided by YOUTUBE’s negligent failure to warn, the BITCONNECT Defendants defrauded tens of thousands of investors by capitalizing on the general public’s excitement for virtual currencies and by luring unsuspecting investors into purchasing unregistered securities and participating in pyramid/Ponzi schemes.

Class action lawsuit

The claimants argue that YouTube should’ve paid attention to the promotional material being spread and monetized on its platform, and should have removed it. Instead, the Google-owned platform accepted the content.

Notably, Google itself recently moved to ban cryptocurrency-related ads, following the footsteps of other industry giants like Facebook and Twitter. Facebook has recently allowed non-ICO ads again.

BitConnect Lawsuit

The lawsuit was initially brought forth by six individuals who claim their losses with the company surpassed $770,000, represented by law firm Silver Miller. It represents all those defrauded by BitConnect’s “wide-ranging Ponzi scheme.”

Per the lawsuit, BitConnect promised users returns as high as 40 percent per month, and 1 percent compounding daily interest, leading to annual gains of about 3,000 percent. It promised these returns through investments made in a “trading bot” that allegedly never existed, as the money was used to pay back other investors.

Moreover its BitConnect Token (BCC), which was used on its lending platform and lost nearly all of its value after the organization finally collapsed, was considered be in violation of the Securities Act, making it an unregistered security.

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The lawsuit doesn’t just go after BitConnect and its founders, but also after promoters who marketed the platform through social media and on Twitter to pump their gains through referral commissions. These include Glenn Arcaro, Craig Grant, Trevon Brown (known as Trevon James), and CryptoNick, identified as Nicholas Trovato.

Binance Adds Staking Support for Harmony (ONE)

On Tuesday (October 15), Binance announced staking support for Harmony (ONE), one of the cryptoassets that had its public token sale on Binance Launchpad (Binance's IEO platform) earlier this year.

Binance's Staking Platform

Binance announced on September 26 the official launch of its Staking platform, which provides a super easy way to earn staking rewards just by "depositing and holding funds" on Binance.

Binance defines "staking" as "the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network."

Here is what Binance Co-Founder and CEO Changpeng Zhao (aka "CZ") said about the exchange's staking service on September 27:

Until today, here were the cryptoassets supported for staking: Algorand (ALGO), Fetch.AI (FET), Elrond (ERD), Komodo (KMD), NEO, Ontology (ONT), Qtum (QTUM), Stellar Lumen (XLM), Stratis (STRAT), and Vechain (VET).

Here are a few things worth noting about Binance's staking service:

  • It is free -- Binance does not charge any fees for staking.
  • It has no "lock-up period" -- you can sell you coins or withdraw them at any time to stop receiving staking rewards.
  • You can trade any portion of your coins while staking (obviously, this will affect your staking balance).

Staking Support for Elrond (ERD)

Binance announced this news via the following tweet:

Binance's staking support for Elrond (ERD) starts on Wednesday (October 16).

The Binance team said that ERD staking rewards would be distributed as follows:

  • Starting at 00:00 UTC on 16 October 2019, Binance will start taking hourly snapshots of users' ONE balances (i.e. 24 snapshots each day).
  • The following two equations will be used to calculate the ONE staking distribution:
    • "ONE generated by each user = Total ONE staking rewards received by Binance * User ONE holdings ratio"
    • "User ONE holdings ratio = User ONE holdings / Total ONE staked by Binance."

To qualify for staking rewards, users need to have at least 175 ONE.

The first distribution will be calculated up to and including 15 November 2019, "with the total amount distributed equal to the staking rewards accrued on holdings during the period."

ONE rewards will be determined on a daily basis (hourly snapshots) and paid out on a monthly basis; staking reward distributions will be completed by the 15th of each month.

 

Featured Image Courtesy of Binance