The BitConnect imitator, DavorCoin, has executed its exit scam. In a Feb. 7 post to its official Medium channel, DavorCoin announced it was ending its lending program, offering some gobbledygook reasoning for the sudden change.
Not so coincidentally, regulators in Texas had issued an emergency cease and desist order against DavorCoin just five days earlier. The order charges DavorCoin with selling securities without a license and with making fraudulent claims about its investment returns.
DavorCoin hit a high around $150 in mid-January, but its price has plummeted since then, and now one DavorCoin is worth 8 US cents.
DavorCoin was another “all-in-one” scam project, promising positive returns every single day to investors, as long as they locked up a certain amount of money in the program. As with the now-failed BitConnect, DavorCoin had its own cryptocurrency and a lending platform offering daily returns up to 2% on investments.
While BitConnect alleged it had market volatility software able to produce daily returns, DavorCoin offered the even less likely arbitrage explanation for its magic. Arbitrage involves buying and selling commodities on exchanges with different prices, buying low on one exchange and selling high on the other. Arbitrage requires multiple exchange accounts and bank accounts in different jurisdictions — not something a small start-up like DavorCoin would have at its disposal.
In its announcement on medium, DavorCoin’s operators offered some rather lame reasons for ending the lending program.
We have carefully analysed the current situation of the Davor project, of lending programs, of the cryptocurrency market and of legal issues regarding lending platforms and cryptocurrencies in general.
There is no doubt for us that the DAV value has been negatively affected by our lending program because the crypto-environment has dramatically changed recently. We did everything possible to protect our platform and our amazing community.
However, DAV price still went from $180 to $0.5 in 20 days.
As a result, we have decided to change our strategy and to end our lending program that has become the only reason why DavorCoin is decreasing in value.
Most users are no longer interested in investing in lending platforms, moreover, they are increasingly concerned about legal issues.
And there is one thing we don’t want which is to offer a different service to users depending on which countries/states they are coming from.
Long story short: they couldn’t attract enough new people into the lending program to continue paying older investors such high daily returns, and as more people caught on to the scam, the token price fell as they sold off those assets.
And just like BitConnect, DavorCoin magnanimously refunded its users’ accounts in — ta-da! — DavorCoin tokens, plus a 10% bonus! So now your 8-cent DavorCoin is now worth 8.8 cents! Woo-hoo!
We will release today all lending packages we have and every user will be credited in his account the number of DAV he placed in his/her lending package plus a 10% bonus.
The staking pool will work as before.
So long, suckers!
OK, to be fair, DavorCoin’s post states they will continue to operate the platform as an exchange and plans all kinds of other improvements for the months ahead, but I don’t buy it. The engine that drove DavorCoin was the hype about the lending platform — it’s the same thing that kept BitConnect running for more than a year. (That, and aggressive marketing.) With no lending platform offering amazing returns, what fool would put money into a copycat project that has already flopped after just a few months?
DavorCoin is dead. Next to fall: Octoin.