A crypto influencer with a large community in India, accused the exchange bitget of having frozen his funds for no reason. A wave of FUD on social media, as some members of the crypto community began to believe the accusations and comparisons between Bitget and the bankrupt exchange FTX. A look back at the events and the official declaration of bitget.
This story has its origin in the launch of the token REELT on several centralized exchange platforms. Quickly after its listing on several CEXthe token crashes, losing nearly 95% of its value and many investors then feel trapped in an “exit scam” (an abandonment of the project by the team selling its tokens).
In the same day, Evan Luthraan influencer with nearly 90,000 Twitter followers, accuses bitget of freezing his account in addition to stealing $200,000 in funds.
Evan then recommends to his community to withdraw their funds from theexchangeaccusing the latter of being run by a Chinese team through an offshore company based in the Seychelles in addition to having reserves 50% collateralized by the token BGB native to the platform.
The hashtag BitgetScam is gaining momentum, mainly in India where it reaches the top Twitter trends.
Abnormal REELT token trading activity on Bitget
On his side, bitget claims to have observed abnormal trading activity in the pair REELT/USDTas soon as it was listed, in particular many orders sales from members of the project team. Indeed, Bitget has spotted 4 suspicious accounts linked to the REELT team: 3 markets makers and Evan Luthraproject advisor.
These 4 accounts sold very quickly 2 million tokensrecovering 400,000USDT and propelling the price of the token from $0.07 to $0.028.
Faced with investor concerns and abnormal deposits and sell orders, bitget approached the team REELT who would have said that these movements on the part of market makers and advisers are completely normal and predictable.
But the fact that the majority of orders are sell orders worried bitget as to the reliability of the project and the intention of the “market makers”. The exchange then decided to stop trading the REELT token in addition to freeze the 4 accounts with suspicious behavior.
The decision to bitget to freeze a user’s funds, however ill-intentioned, may still seem arbitrary while other users are pleased with the means implemented to prevent the proliferation of projects considered as “rugs“.
To calm things down, Bitget also decided to compensate users who lost funds by buying REELT tokens during listing:
Bitget will launch a compensation plan for users who suffered losses in this incident with 600,000 USDT of our own funds and about 400,000 USDT already frozen.
Users who purchased REELT at a price higher than USD 0.020235 and fulfilling other conditions will therefore receive compensation. The funds used in the compensation plan appear to come from bitget reservesbut also funds frozen in the project teaman impressive decision.
The compensation conditions can be found in the Bitget blog post.
Bitget has always been committed to discovering projects blockchain high quality in the industry, especially teams that share our long-term vision. We do not associate with speculators looking to get rich overnight. We will always value those who focus on BUIDLING technology and driving the growth of our ecosystem.
Bitget official statement
In conjunction with the policy of 60 day trial period projects listed on the exchange, Bitget quickly decided to delist the REELT of its platform, believing that the behavior of the team represented a violation of the rules of its “Innovation Zone“.
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