What is Regalcoin? BitConnect 2.0?

In this post, I’m going to dive in and clarify what Regalcoin is all about (i.e., the facts) and then outline why I’ve not invested anything into this platform (i.e., my personal review of it).

Before I begin, there are many similarities between BitConnect and Regalcoin. Because of that, you’ll find that this post closely resembles the post I wrote about BitConnect here.

Remember: I’m not a financial advisor. Read my full disclaimer here.

The basics

Regalcoin (REC) is a cryptocurrency which completed their ICO on the 21 September 2017 with the sale of 5 million coins. It is now ranked as the 64th largest cryptocurrency by market capitalisation, standing at $93,126,772 ($33.14 per coin) at the time of writing. It’s listed for trading on CoinExchange and YoBit (and potentially Nova Exchange in the near future).

You can peruse their website here. There’s a small (58 subscribers) Reddit ‘community’ at /r/regalcoin and a BitcoinTalk thread about it here. Their team appears somewhat active on Twitter and Facebook. Their roadmap is shown below. Further details can be found in their whitepaper here.

Regalcoin is frequently referred to as ‘BitConnect 2.0’, which captures the essence of their proposition and design well. Just like BitConnect, it’s about lending out your money to Regalcoin’s trading bot which produces returns of up to 45% per month. However, the whitepaper does clarify that these returns are variable and depend on the performance of their trading bot.

‘Clarifies’ that ROI is variable and depends on the performance of their “BOT”

I could only find the performance over the last 3 days in the investment dashboard.

The only data I could find on the returns generated from the trading bot.

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. I couldn’t conclusively determine whether interest was compounded (please correct me if my assumption is wrong).

“Should I invest into Regalcoin?”

I’m not investing anything into this. Just like I described in my BitConnect post, there are red flags everywhere which are screaming “stay away!” from Regalcoin too. Things such as:

  • There’s no proof (e.g., raw trade history) that the trading bot exists.
  • It guarantees returns on investment.
  • Funds invested are locked-in for 99 days.
  • The affiliate program will (probably) drive the growth of the platform.
  • No outline of who the team behind this are.
  • The website is terrible (i.e., vague, confusing, uninformative, and half-broken).
  • Grammar in all their communications is awful.

There’s not as much (positive and negative) chatter when compared to BitConnect. This might be because:

  • It’s a new entry into the marketplace.
  • It’s not interesting or unique (i.e., just a copycat), compared to other projects.
  • It appears like such a terrible offering that people don’t feel the need to talk about it –  “Who would seriously invest in this?”

Whatever the reason, I’m going to briefly dive into some of these ‘red flags’ now.

No proof that trading bot exists

Just like BitConnect, the team behind Regalcoin expect investors to trust:

  1. That the trading bot exists and;
  2. It generates the returns they claim it does.

In both cases, no evidence has been provided to substantiate the existence of the trading bot. Some limited amount of trading data (showing buy and sell orders) would (likely) dismiss the majority of scepticism. I couldn’t even find information on the supposed returns, beyond a section of the platform’s dashboard which shows you the returns over the last 3 days (shown below again). While this shows the supposed returns of their trading bot, it doesn’t prove that the trading bot exists and is achieving these returns. We just need proof.

Investment tie-up

Regardless of how much you invest, your funds are locked into their system for 99 days. Before this capital release period ends, any supposed profit is only a paper (i.e., unrealized) gain.

This lock-in period is lower than BitConnect, where the shortest investment tie-up is 120 days (and that’s only if you invest $10,010 or more). By comparison, I suppose Regalcoin looks somewhat better. But do consider: you’re still locking up your money for over 2 months. 

There are some legitimate reasons that lock-in periods are sometimes required in traditional markets (see here). Some of these might apply here. 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 potentially be sold is lower than it would be if the lock-in period didn’t exist. Why is this really necessary?

The affiliate program

I’m not clear exactly how this affiliate program works, but it looks similar to BitConnect’s tiered referral (i.e., pyramid) system. This means that when someone uses a referral link which you’ve provided them, you earn 7% of whatever they lend on the platform. If they then refer someone, you earn 2% of whatever that person lends too. Then if those people refer someone, you get 1% of whatever that person lends as well. There might also be something called ‘network bonuses’, but I couldn’t make any sense of it.

Aside from the negative behaviour this might encourage in the community (see the BitConnect post for more on that), what is the effect of such an affiliate system? This setup should lead to increased demand for Regalcoin, as existing users are given a strong financial incentive to expand their network more and more.

Communication quality

All of Regalcoin’s public-facing communication is abysmal. I could forgive some bad grammar, but it isn’t just that. Check out their website for yourself here. It’s vague, confusing, and just plain nonsense at times. It all points to a single page (i.e., the landing page) and has broken links in places too. I only made sense of this rubbish by reading their whitepaper, sales presentations, and signing up to their platform.

NONSENSE!

What kind of signal does it give to investors when their team can’t put together a clear and informative website?

Why is Regalcoin possibly setup this way?

Just like BitConnect, it’s possible that people will make a lot of money through this platform. However, this does not mean it isn’t a scheme. Unfortunately for everyone, we cannot prove it either way unless:

  1. It crashes into flames.
  2. The team release convincing evidence (e.g., trading logs).

But while we can’t prove that Regalcoin is a scheme, there are clear signs that indicate it is. Regalcoin might actually have even more signs that it’s a scheme than BitConnect. Just like BitConnect, Regalcoin might be set up to operate 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.

There might be another component to this as well. Two main features of the platform are:

  • The lock-in period of 99 days which lowers the number of Regalcoin available to trade.
  • The affiliate program which encourages existing users to increase the demand for Regalcoin.

As long as coin issuance isn’t too high, this might produce the following effects:

  • The stabilisation or inflation of the Regalcoin asking price.
  • The perception that the project is worth investing into as:
    • The asking price of Regalcoin increases.
    • Existing users reporting that the platform ‘works’ and generates sizeable returns.

In other words, while these design features might initially look innocent, they synergise to inflate Regalcoin’s price and accelerate user adoption (due to the fear of missing out).

“Should I invest anything into Regalcoin?”

I’m not a financial advisor and I don’t pretend to be. Perhaps you should ask these redditors instead…

wow.
🙁

In his video today, Crypto Daily commented briefly (see here) on the recent jump in Regalcoin’s value. He said:

It seems [to me] like the vast majority of people are not interested in buying these coins to actually use one day. They’re buying these coins to sell them at a profit.

Unfortunately, I can’t help but agree. Some people seem to be jumping into projects like this (and getting others involved too) with the awareness that they’re terrible.

Bottom line: I’ve invested nothing into Regalcoin and won’t be recommending anyone else to either. It’s absolute trash (at the time of writing) in my unprofessional opinion.

Don’t be a sad puppy though, it’s not all doom and gloom!

If you do have any suggested corrections to this post, please let me know in the comments section!