cryptodaily.co.uk
Tech entrepreneur and serial crypto investor Evan Luthra has accused Bitget, a leading cryptocurrency exchange, of being involved in a widespread scam.
In a series of tweets, Luthra raised several concerns about the company, including the anonymity of its founder/CEO, the absence of a legitimate office address, and terms of service that potentially allow Bitget to freeze and take user funds.
I had $200,000+ in Bitget and it got stolen.
— EvanLuthra.eth (@EvanLuthra) April 4, 2023
The worst part is that they're not responding to me, instead, they're spreading lies about me: (🧵)#BitgetExposed pic.twitter.com/C1eKxKYptm
Further, Luthra highlighted that nearly 50% of Bitget's reserves are in its own token, $BGB. He compared this situation to FTX before its collapse, drawing parallels between the two companies.
He also pointed to a recent exploit in which over $8 million was lost, suggesting that it was an inside job rather than a genuine hack, as centralized exchanges are not prone to hacking in the same way that decentralized exchanges are. However, this assertion is based on wrong information, it was BitKeep, a crypto wallet firm, which was involved in the exploit, not BitGet.
Luthra claims that Bitget's marketing relies heavily on paid promotions and has little organic support, with most of their followers being fake or bots. He compared this marketing strategy to that of FTX prior to its downfall. Luthra also accused Bitget of paying influencers and accounts to defame him for dumping tokens, rather than addressing his concerns directly.
The tech entrepreneur, who claimed to have lost more than $2 million in FTX in addition to some $200,000 "stolen" by Bitget, stated that he has invited the exchange's representatives to join him in a live discussion. Luthra says he has spoken in private with Bitget employees who confirmed the scam, and he is trying to persuade them to speak up publicly and expose the company.
A Forbes 30 under 30 winner, Luthra is an accredited angel investor and has invested in a wide range of products and businesses, from being the first investor on social media platform Snapchat, as well as being a seed investor in crypto project Hashgraph, and Bored Ape Yacht Club NFTs, among others. Luthra is also a member of the Forbes Technology Council.
Bitget has responded to the allegations in an official statement addressing the issue:
"On March 31st, we announced that four Bitget accounts have been temporarily frozen for involvement in suspicious trading behaviors. Specifically, we discovered four accounts associated with the REELT team (three market-maker accounts and one advisor account) sold more than 2 million REELT tokens soon after listing, leading to a 60% drop in the REELT price, as well as a number of complaints from the community."
Among these accounts were Luthra's, with the influencer technically dumping 1.18 million in $REELT. Luthra was an advisor of the REELT project, prompting speculations of a possible case of insider trading for the project.
"We value the contributions of crypto influencers in the industry and are committed to working with genuine individuals to help bring cryptocurrencies to the masses. However, it is disappointing to see a public figure who refers to himself as an influencer resorting to dishonorable methods, causing reputational and financial damage to the market," Bitget stated.
Bitget recently received $10 million in investments from Dragonfly Capital to boost its derivatives business. Founded in 2018, Bitget's derivatives exchange has seen some 80,000 traders and 380,000 copy traders (automated trading positions) on its platform. Bitget has publicly disclosed that since its inception in 2018, the exchange has grown to comprise over 80,000 traders and 380,000 copy traders, or individuals that sync their trading positions with that of traders using automation.
Note: This article has been updated to reflect Bitget's official statements regarding the issue. Update time: UTC 16:08
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