In a space of a few months lending platforms have come under fire for exit scamming with Bitconnect being the first major player to do so and soon after favour had followd. Joining them in the latest exit scam is Falcon coin, as of 04 March 2018 they have shut down services and are nowhere to be found.
What is falcon coin?
Falcon Coin is a peer-to-peer, community-driven decentralized cryptocurrency that allows people to store and invest their wealth in a non-government controlled currency, and even earn a substantial interest when investing in the Falcon Fund.
Falcon Coin offers users the opportunity to invest in a lending platform. Which they claim to aggregate loans and re-loans and calculate bonus interest on the total investment level. The higher the overall investment in Falcon the better rewards you receive.
Falcon Lending Platform
You can invest Falcon Coin in Falcon lending platform exclusively from the Falcon Dashboard. This investment option involves profiting from Falcon trading bot and volatility software. You will receive daily profit based on your investment and receive a bonus depending on your total lending amount.
The lending term for all investments into the Falcon Fund is 180 Days. You will receive your capital back to take out from Falcon lending platform or optionally reinvest back into the lending platform to continue receiving daily profit and Bonuses.
Was Falcon Coin A Ponzi Scheme?
The reason I believe Falcon Coin is a ponzi scheme is because of the amount of interest they are paying and the fact that what they are offering is exactly the same as other ponzi schemes that have already been exposed and collapsed like BitConnect.
The whole business model is identical, so why would it be any different? Simple mathmatics will show you everyone getting 1% gaurenteed interest simply cannot be sustained.
Why is there so much money stolen?
With these lending platforms when users invest they send the platform popular crypto like Bitcoin, Ethereum or Litecoin that has solid demand and value in exchange for their useless currency. As the scheme keeps going investors in the lending coins think the value is increasing along with the interest they receive.
Investors think they getting rich, which they are on paper but until they can withdraw after the designated lock-in period which it's technically not available to you
Meanwhile the invested cryptocurrency of new investors is used to pay back the old investors, encouraging them to reinvest and once it reaches a point of no return these companies go belly up and make a way with the invested cryptocurrency while investors are left with the useless platform coin.
How the news broke
The news was actually posted in their telegram by one of the community admins who picked up that the site was down. It is also reported that a bitcoin wallet address shared by their founders WIll and Mike. The admins are volunteers and not employees of the team and were also blindsided by the shutdown.
About 1116 BTC coins have been moved from the flacon coin wallet amounting to around $13 million of investor money at the time.
Communication from the falcon team
There has been absolutely no communication from the Falcon team, no one even knows who they are and the website is down. You can find it here or at least this is where it used to be - https://falconcoin.co/
As you can see from this screenshot of the falcon coin domain it has been taken down
There official Twitter has absolutely no mention of ending of service with the last tweet posted on the 1st of March 2018 saying Falcon will fly, I guess that meant to fly off with all the investor's money
Official Twitter account - https://twitter.com/FalconCoinHelp
I did, however, find this Twitter account - https://twitter.com/FalconCoin_Help with the following Tweet
Unfortunately. We have decided to terminate our lending platform as interest decreased. We would like to show appreciation to our investors for sticking with us through it all.
— FalconCoin_Help (@FalconCoin_Help) 4 March 2018
1. First 100 investors to send 0.2-0.5 BTC to 18au3WBMz89KMMmPEw9VGvT82H7fNSGaPx will receive 1 BTC.
Reddit threads
You can also find some information but very little if I may say on the Falcon coin Reddit - https://www.reddit.com/r/FalconCoin/
I'm pretty sure any investors will be banging on this Reddit thread similar to what we saw with But connect and Davor coin.
Lending coins
Since the existing scam of bitconnect many of the cryptocurrency enthusiasts has been coming down hard on lending coins. Spreading FUD, warning community members to pull out and stay away and this is why we're seeing lending coins drop out faster and faster.
If you are invested in a project like Lendconnect I would say to get out as soon as possible, because it's highly likely it will follow the trail of its predecessors.
Investing in Lending platforms
If you are going to invest any money into this kind of the lending platform you should be prepared to lose it all. You could make money in the short term, but it is highly risky and in the long term you will lose money because these platforms always end up either collapsing before you can get your money out since most of these platforms base their investments with a lock in period.
Additional reports
For more on this, you can check out a video by 