The blockchain industry is revolutionary, to say the least. Over the past three years, the crypto market has positively impacted and changed lives — including mine. That’s why I’m a huge advocate of cryptocurrency and its power to give anyone financial freedom. Perhaps that’s why the quote from MicroStrategy CEO Michael Saylor calling Bitcoin (BTC) “digital gold” resonated with me.
As an industry still in its infancy, I’ve had my fair share of unfortunate events happen to me, but none as bad as what I experienced with Bitget. Allow me to share the details of an ordeal in which Bitget seized over $200,000 of my money, directly resulting in over $2.5 million in losses, and – by my estimate – over $10 million in reputational damage.
I lost: $16M+ due to Bitget $4M+ bet on UST/Luna $2M held on FTX $1M+ held on Autobahn And many more in other scams. Here are my 7 experiences that can save you millions:
— Evan Luthra (@EvanLuthra) August 15, 2023
One might think that an exchange as big as Bitget is all about transparency. However, I realized that this is not the case. Crypto exchanges have fallen due to lack of transparency. FTX is a rather painful example that is still fresh in our memory.
FTX CEO Sam Bankman-Fried reportedly transferred up to $10 billion of FTX customer funds (without the knowledge or approval of said customers) to his trading firm Alameda Research, whose assets were primarily held in the exchange’s native token, FTX Token (FTT). Binance CEO Changpeng Zhao’s announcement that Binance was selling its stake in FTT caused panic among customers, leading to a bank run and, ultimately, the bankruptcy of FTX Group.
My Experience with Bigit
I have been a Bitget user for a while. But in the first quarter of this year, Bitget blocked me from withdrawing my tokens — despite my full compliance with the Know Your Customer agreement.
This question is related to my role advising a project ReelStar starting in October 2022.
ReelStar’s announcement regarding my advisory role was very public. It is safe to say that it is public knowledge. In the same way, it is public knowledge that I will be compensated in the project’s tokens. Unlike most people (including Bitget executives) who may think, I will not use dollars to promote projects I am not familiar with, unlike celebrities including the Kim Kardashians or Floyd Mayweathers.
Related: It’s Time for the SEC to Settle with Coinbase and Ripple
Therefore, I only make money if the project’s token value grows. This is pretty standard since I’m an advisor — not an influencer. I get paid in tokens because I bring more than just influence. I connect projects with partners, bring in funding, and ultimately, credibility.
On March 23, it was time for ReelStar’s native token, Reel Token (REELT), to be listed on exchanges. Bitget charged a fee for this right — six figures, in USD, just to give you an idea of what was going on behind the scenes.
I had been an advisor to the project for a few months at that point, and had been promised compensation in the form of REELT. Since I wasn’t earning anything for the work I put in, with the blessing of ReelStar founders Navdeep Sharma and Nick Bahl, I sold less than 3% of my personal REELT stake — less than 0.03% of the total REELT supply.
But my funds - including Bitcoin and altcoins I already owned on exchanges before REELT - were blocked without any explanation. My attorney, Charles Slamowitz, and I are now working through my lawsuit to determine if Bitget stole my funds because Bitget refused to notify me.
Related: ETFs Will Revolutionize Bitcoin and Other Cryptocurrencies
Currently, I have no idea where my funds are. For all I know, Bitget may be using them for its own investments - and may be planning to keep my money permanently.
At first, I thought there was a mistake and that I could clarify something with Bitget - but I quickly realized it hadn't made a mistake.
Is Bitget the next FTX?
I lost over $2 million in the FTX debacle and have been invited on Fox, CNBC, and many others to speak about what I think went wrong. Right now, Bitget is behaving in a way that is arguably reminiscent of FTX before it collapsed. It would be wise to consider what this means for users. I have been burned, and I think I am well-placed to point out the issues surrounding this exchange.
I also find it odd that a company like Bitget would hire a former host of a Chinese state-owned TV network — Gracy Chen, who previously worked at Phoenix TV — as the key public face of its business. Aside from Chen, we know very little about the exchange’s executives. Who actually owns Bitget? Who are the members of its management team? Who controls the user funds that Bitget keeps in custody? These questions are rarely asked, and the exchange refuses to provide many of the answers.
Continuing its bizarre hiring practices, it hired non-professional celebrities, including actors Adam DeVine and Lionel Messi, to market its services. This is a dangerous precedent that FTX initially set, and it is worrying. Using celebrities to market cryptocurrency products to an unsuspecting public — especially millennials and Gen Z — is arguably not ideal for the market. FTX fell in part because it relied on influencers and marketing to win over casual users while failing to prioritize the hard work on the back end.
In another parallel to FTX and its reliance on its own FTT token, a large portion of Bitget’s reserves are held in its native token, Bitget Token (BGB), making the exchange vulnerable if the price of its token drops.
Bit destroys the list of coins?
Recently, GPT Guru accused Bitget of sabotaging the listing of its GPTG token on the exchange. According to GPT Guru, the listing price of GPTG was set at $0.0035, but Bitget actually listed it at $0.084 — 24 times higher. This resulted in a huge red candle that sabotaged the launch.
“Upon asking more about how it happened, we discovered that it was Bitget’s own team that was responsible for the $GPTG listing screwup,” Guru said. “Not only that, but the Bitget team itself admitted to GPT Guru’s CEO that it was an inside job within the Bitget team.
According to GPT Guru, Bitget initially agreed to compensate users who lost funds, but has since deleted its messages and stopped communicating with the GPT Guru team. This led GPT Guru to threaten to take legal action against Bitget - but not everyone can afford expensive lawyers.
These actions are unfair and reflect poorly on Bitget as a cryptocurrency exchange that enjoys control over its users’ funds. How can it be stopped from engaging in similarly questionable — and arguably unethical — behavior in the future? These questions should concern all of us. In a time of market uncertainty and looming global regulatory action, we deserve greater transparency from the exchanges we use — and clear assurances about the behavior we can expect.
The central question for cryptocurrency exchanges is what legal obligations — if any — they owe to their users in particular. My lawsuit will find out.
This column contradicts Bitget’s view that: Bitget has acted ethically with crypto influencers’ accounts
Evan Luthra is a 28-year-old crypto entrepreneur who sold his first company, StudySocial, for $1.7 million at age 17 and built over 30 mobile apps before age 18. He got involved in crypto in 2014 and is currently building CasaNFT. He has invested in over 400 crypto projects.
This article is for general informational purposes only and is not intended and should not be considered legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Author: Deepchain DCNews
Compiled by: Sister Shen
Twitter: DeepChain
Twitter：https://twitter.com/DeepChainUS