Back when I originally wrote this in October 2017, Regalcoin was a BitConnect copycat (i.e. a clone) which was getting lots of attention.
That’s mainly because it promised returns of up to 45% per month, had a lucrative affiliate program which incentivised cryptocurrency YouTubers to shill it, and was promoted as a way to get in on the ground floor with something just like BitConnect (which had seen a massive increase in coin valuation over the course of 2017).
It went from a high of over $70 per coin in October 2017 to just $0.0011 in 2020.
In this post, I outline what Regalcoin was all about and the warning signs which indicated it was a Ponzi scheme – just like BitConnect.
What is Regalcoin?
Regalcoin (REC) was a cryptocurrency which completed their ICO on the 21 September 2017 with the reported sale of 5 million coins. At one point in October 2017, it was being traded for over $70 per coin on CoinExchange and YoBit.
There was a small (58 subscribers) Reddit ‘community’ at /r/regalcoin and a BitcoinTalk thread about it can be found here. You can find further details in the Regalcoin whitepaper.
This was the Regalcoin roadmap, which I lifted from their whitepaper.
Just like BitConnect, they promised absurd returns of up to 45% per month if you invested into Regalcoin. To make it a little more realistic, they did clarify returns were variable based upon the performance of their trading bot (so it wasn’t guaranteed).
‘Clarifies’ that ROI is variable and depends on the performance of their trading bot.
I could only find the performance over the last 3 days in the investment dashboard. There was no further data that I could find on their website.
Putting this into perspective, a $100 investment which accrues an average of 1.4% each day (compounded) would return a profit of $295.98 after 99 days (the mandatory lock-in period). If you invest more than $10,000, you get the variable return from the trading bot plus another 1% every 11 days on top.
The Warning Signs
Just like I described in my BitConnect post, there were red flags everywhere which are screaming “stay away!” from Regalcoin.
There was no proof (e.g. raw trade history) that the trading bot exists.It promised large returns on investment (up to 45%, plus bonuses).Funds invested were locked-in for 99 days.The affiliate program was lucrative and designed to drive the growth of the platform.There was no outline of who the team behind this were.The website was terrible (i.e. vague, confusing, uninformative, and half-broken).Grammar in all their communications was awful.
There’s No Proof That the Trading Bot Existed
Just like BitConnect, the team behind Regalcoin expected investors to trust:
That the trading bot exists and;It generated the returns they claim it did.
In both cases, no evidence was ever provided to substantiate the existence of the trading bot.
Some limited amount of trading data (showing buy and sell orders) would dismissed much of the scepticism. I couldn’t even find information on the historical returns of the trading bot, beyond a section of the platform’s dashboard which showed you the returns over just the last 3 days (shown below again). But this didn’t prove that the trading bot existed and was actually achieving these returns.
Regardless of how much someone invested, funds were locked into their system for 99 days. Before this capital release period ends, any supposed profit is only a paper gain (i.e. unrealised).
This lock-in period was lower than BitConnect, where the shortest investment tie-up was 120 days (and that’s only if you had invested more than $10,010). However, you were still locking up your money for over 2 months.
There are some legitimate reasons that lock-in periods are sometimes required in traditional markets. However, the impact of the lock-in period (as long as new coins don’t enter circulation too fast) is that the number of coins which could have potentially been sold was lower than it would have been if the lock-in period hadn’t existed.
The Affiliate Program
I was never clear exactly how Regalcoin’s affiliate program worked because of how badly written their marketing materials were. However, it looked similar to BitConnect’s tiered referral system (i.e. pyramid).
This meant that when someone used a referral link which you’d provided them, you would earn 7% of whatever they invested into the platform. If they then referred someone, you would earn 2% of whatever that person invested too. Then if those people refer someone too, you would get 1% of whatever that person invested too.
There might also have been something called ‘network bonuses’, but I couldn’t make any sense of it.
This kind of system should lead to increased demand for Regalcoin, as existing users are given a strong financial incentive to push more and more people to invest into this Ponzi scheme.
All of Regalcoin’s public-facing communication was abysmal. I could forgive some bad grammar, but it wasn’t just that.
It was vague, confusing, and just plain nonsense at times. Their website was just a single page (i.e. the landing page) and had broken links everywhere too. I only made sense of this rubbish by reading their whitepaper, sales presentations, and signing up to their platform.
Complete. Utter. NONSENSE!
Why Was Regalcoin Setup This Way?
It’s difficult to conclusively prove that something is or isn’t a Ponzi scheme until either:
It crashes into flames.The team release convincing evidence (e.g. trading logs).
But while we couldn’t 100% prove that Regalcoin was a Ponzi scheme at the time, there were clear signs that indicated that it was (as highlighted above).
Back in 2017, I thought that Regalcoin was setup to operate something like this:
Attract initial investors with the lure of high daily returns.Subsidise the withdrawals of capital/returns (i.e. realised gains) of initial investors through:Themselves (i.e. initial working capital).Existing investors who have not withdrawn capital or returns (i.e. re-invested).New investors who are still locked-in. Encourage adoption of the platform by new users via:Proof that the platform ‘works’ (through users who have withdrawn capital/returns).A percentage-based referral system.
In other words? Just like a Ponzi scheme. While Regalcoin’s design might initially look innocent, they synergise to inflate Regalcoin’s price and accelerate user adoption.
Regalcoin: Just Another Crypto Scam
It was clear that Regalcoin was a scam.
Hell, even advocates of Regalcoin knew it was a scam.
And yet, these scumbags still pushed people to invest. Here are just a few I found on Reddit.