Launched in late December 2017, DavorCoin – the pyramid lending scheme has failed spectacularly and it’s dev team announced last week that it was closing its lending platform.
According to CoinMarketCap, the price nearly hit $180 just over a month ago but the value has since plunged to approximately $0.03 after Texas State Securities Board (TSSB) issued a cease-and-desist to Davorcoin on 2nd Feb, alleging at the time that those behind the scheme had intentionally hidden information from would-be stakeholders.
What Is DavorCoin?
DavorCoin was a cryptocurrency lending scheme similar to BitConnect. Lenders have the ability to invest in DavorCoin and receive daily interest paid out In US dollars at an astounding 48% per month. Further, investors lending $1001 worth DAV (DavorCoin) will also be eligible for a bonus every day apart from the interest. The daily interest can also be boosted by locking the Davorcoins for a specified period. Further, the interest rates mentioned in the official website of Davorcoin is indeed mind boggling. An affiliate program is also offered by this crypto with rewards for bringing users to its platform.
The Alleged Exit Scam
On 2nd Feb, the project team released all coins, crashing their price by 99%. The ominous signs happened in mid-January, but the team only threw in the towel in February. Before that, the coins were locked away. The last time the Davor Coin platform paid out interest, it was not in dollars, but in DAV coins, bringing the ire of investors.
The final message from the team promised to return until the end, but there is little hope that the value will recover again:
Due to an overwhelming number of dav putting into staking our pool stop functionning correctly. We released all dav and we're working to find a solution
Staking pool will be back soon
We're implementing new features to make the blockchain more stable and DavorCoin more valuable
— DavorCoin (@DavorCoin) February 8, 2018
Cease and Desist
Just like in the case of BitConnect, the final fallout for Davor Coin came after a Cease and Desist order from the state of Texas. The order also underlines the fact that the DavorCoin team is largely unknown, as well as the origins of the company.
“The emergency order found that DavorCoin is telling investors they can earn lucrative profits by investing in a lending program based on a new cryptocurrency known as davorcoin. Investors allegedly purchase davorcoin and then lend it to DavorCoin,” TSSB wrote at the time.
The DavorCoin team wrote in the Feb. 7 blog post:
“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.”
The blog goes on to state that those behind DavorCoin will seek to resuscitate its price through “transforming DAV into a strong cryptocurrency.” Hypothetically, DavorCoin could rise off the ground and return. In reality, though – it is unusual that the DAV digital asset would become valuable again.