Let me answer some of your concerns here. For one thing, All Cryptocurrency is unregulated. Poloniex and Bittrex are unregulated. They could take everyone's coins in a flash that is left in their vaults and legally we could not do anything about it. There is a certain amount of TRUST that goes into investing in this market.

Bitconnect of course uses there bots to trade USD/BTC. They even state this on their website. The volatility of the USD/BTC pair. So, yes, they take your Bitcoin to trade with and give you their token in return plus trade your Bitcoin and earn a good ROI.

Is BCC riding on the coat-tail of Bitcoin? Of course, but so is every other Crypto out there. They are generating a good income by allow their coins to be sold and most loan their coin back to them allowing the to sell them on their exchange. They make money on the coin and on running the exchange. So, they have three sources of income and we all get a fair share of the income. This is a good business model. I am not thrilled of the referral program but that is the way most online companies are doing business these days. I guess it is cheaper than advertising and generates an income to the person working at getting them more business. It seems to be a win/win for everyone.

By the way, Bitconnect has just got into the top 10 of all coins in market cap. The BCC also is the most stable of any crypto out there except for Tether.