Early 2016 was the busiest time in Btcpop history, and not for the right reasons. Excited with success and fresh capital, new features were launched nearly every week, new business opportunities acquired, new bugs, new exploits, new hacks and in the end….. a exit scam.
But, while in the end the fall of Btcpop #1 was fraudulent, it didn’t start from a place of malice. It was exciting times in cryptocurrency. The price was raising, adoption was thriving, and more and more people were joining the cryptocurrency space.
To Break it down:
- Shares and IPO’s Feature Launched: This highly anticipated feature unleashed a backlog of IPO’s excited to pioneer in this new space. This included management who was in the process of acquiring a shooting range called Target Sports which it launched an IPO for. This launch also brought with it a lot of headaches as poor coding caused bugs and issues which needed to be fixed (at the same time as other features requiring fixes).
- Altcoin Exchange and Collateral Launched: The idea of using altcoins for collateral had long been anticipated. While the markets and exchange seemed to operate fairly well like shares, security for the altcoin wallets was not ready for the task. More coins meant more vulnerabilities and hackers took advantage.
- Bonds Launched: A feature launched too soon and with poor coding.
- Instant loans Launched: This feature of being able to get a loan instantly and in increasing amounts turned into 1 of if not the biggest exploitable features at Btcpop. Improper coding and logic allowed borrowers to take out and pay back many “reputation loans”…but at the end they could borrow more than they paid back in fees+interest. So while a record number of loans were taken and repaid, in the end BTC was lost to these borrowers as they never had any intention of repaying their highest level loan.
- Big Plans for Management: As mentioned earlier, management had some big ambitious plans which could have been an outright scam, or filled with a little truth. Called Big Plan 1, Big Plan 2, Big Plan Pt 3 and the Target Sports IPO. Altogether Lee or management borrowed 850 Bitcoin from its users. Which it made a few payments on and then ended up defaulting on the whole amount.
- Goat Points: Exactly what was needed at this time. Goat Points were a feature added to Btcpop. They are listed as an altcoin, but there is no blockchain. Goats were instead mined by posting a picture of a goat in chat…..this quickly ruined chat and caused a whole host of problems for what might be the dumbest idea in the world.
- Hacking and Deposit Bonus: During all of these launched the support tickets rained down faster and faster. Then to top it off, Btcpop’s hot wallet was hacked along with nearly all the altcoins on the exchange. Not once, but Twice. This left Lee in a bad situation, but instead of coming clean, he did what any rational person would do….offered a 10% deposit bonus to make problems and debt 10% worse! And not to be forgotten the landing page that took 3 hours to load
After all of this Btcpop was essentially left in shambles in the backend. Broken code, 100’s of support tickets, missing balances, and to top it off a raising Bitcoin price and fresh new wave of defaults to draw from the insurance fund. This would eventually lead to the sale of Btcpop to its current owner covered in the next timeline event.