Judging by recent Crypto Twitter activity, it seems like the biggest scam in the cryptocurrency ecosystem – BitConnect, might be back!
A new Twitter profile called Bitconnect2.0, has just joined Twitter on May 2019. Their bio reads “Cryptocurrency Earning Platform” and they seem to be coming from Cayman Islands. Their first tweet is an announcement where they state that Bitconnect2.0 will go live on July 1st:
Obviously, this tweet gained very quick popularity and at the time of writing has hundreds of answers and likes. Mostly the replies consist of memes of Carlos Matos yelling “Bitconnneeeect” and people telling that they cannot believe that BitConnect might be coming back.
Scammers gonna Scam
While this news is just a day old, crypto Twitter has already found some interesting hidden things about this “new” project.
First of all, their new domain bitconnect.io is registred under a company called NameCheap Inc, and their domain expires before their factual launch! The first registration was on June 19, 2017, and it expires on June 19, 2019. But their first tweet says that the platform will go live on July 1st. We expect that they will update the domain expiry date.
Also, their second tweet is a Binance referral link:
And as expected they wrote a very misleading message along with the referral link, which makes others think that BitConnect might be doing something together with Ethereum. Many tweeters have already notified Changpeng Zhao, the CEO of Binance. They believe that the BitConnect referral link should be eliminated, because of fraudulent actions in the past.
Moreover, people look at this as some sort of a joke, but at the same time they are aware that the recent bullish market activities might be a good foundation to scam new cryptocurrency beginners. And who else to use this opportunity than BitConnect.
The financial pyramid that collapsed
BitConnect Coin launched in 2016. One year after the ICO was in progress, the cryptocurrency value was over $2.5 billion. BitConnect guaranteed investors up to 10% return of their investments, on a month-to-month basis.
In January 2018, the BitConnect Coin market collapsed. Regulators sent letters to investors warning of participation in the project, stating that it was a financial pyramid. Soon the company stopped operating, and investors remained in the hands of a “virtually useless” cryptocurrency.
Recently reported by Christianity Today, it looks like the worldwide cryptocurrency scam OneCoin has got to South Pacific Christian centers. OneCoin supporters/investors got to their pastors to preach the idea in their congregations.
$2 Million Lost!
Both churches, the Samoa Worship Centre Christian Church and an Auckland branch of the Samoan Independent Seventh Day Adventist Church were the targets for OneCoin supporters. These investors had preached the idea to the main pastors of both churches. It all resulted in a few of the congregants investing in OneCoin. Now they report that they have lost around $2 million. However, the investors who “sold” the idea also state that they are the victims in this situation, but the Central Bank of Samoa (CBS) concluded that they knew the participants and are in on the fraud.
CBS Releases a Statement
The Central Bank of Samoa released a statement citing the New Zealand Financial Intelligence Unit’s report about OneCoin at the end of April. They are calling it a “Hybrid Ponzi-Pyramid Scheme”. Also, they claim that OneCoin transactions have “propelled the financial problem in NZ”.
“OneCoin has circumvented Samoa’s financial system (because of our blockages on all OneCoin transactions at all Financial Institutions in 2018), and have opted to use the NZ Financial System to conduct their businesses and transfers,” says in the report. NZFIU estimated that OneCoin scheme transferred around $3.5 million NZD out of NZ.
“…trustworthy, hence,people of the congregation will follow suit.”
The CBS explained the scheme which OneCoin used to get newcomers to their Ponzi-Pyramid-Scheme:
“The target of OneCoin is through the Churches. There are two large churches that were used in OneCoin operations. These two Churches, although originated in Samoa, have branches in New Zealand and Australia, thereby affecting the Pasefika community. This is why NZFIU have formulated the view that public education on the issue would be futile because the Church Ministers are the promoters, and they are held out to be trustworthy, hence, people of the congregation will follow suit.”
OneCoin damages the international judgement on cryptocurrencies.
At the moment, CBS has outlined specific details on how the Public should react to various cryptocurrency events. That is, if any person or organization willing to conduct crypto investment presentations or workshops without the prior approval of the CBS, is considered a criminal activity. Moreover, if any of the hotels or organizations that host this kind of events without the prior approval of the CBS, is also considered a criminal activity.
Basically, this means that any conference or cryptocurrency/bitcoin meet-up or workshop or anything related to that subject first has to go through governmental institutions to approve their intent. Government centralization at its finest, so to say, but all thanks to OneCoin, for now.
What is OneCoin?
According to the company, its main business is selling educational material for trading. Members are able to buy educational packages ranging from 100 euros to 118,000 euros. Each package includes “tokens” which you can assign to “mine” OneCoins. The company claims that they have mining servers at two locations in Bulgaria and one site in Hong Kong. Each level (except six and seven), or package, gives new educational material which presumably OneCoin is plagiarising from several sources.
Earlier we reported that one of the OneCoin leaders and founders Konstantin Ignatov was arrested in Los Angeles by the FBI for possible wire fraud. Moreover, the FBI is charging Ruja Ignatova with wire fraud, securities fraud, and other charges. However, she is still at large and wanted in the U.S.
In this article we will look over the 7 ways how to report a scam exchange.
So you have been scammed by a shady exchange. This is nothing new in the cryptocurrency field, and many of us have been there. Precedents like BiteBTC, Coinsmarkets.com, Bitconnect, Bitpetite and many more have “exit-scammed” and stole their users’ funds. Although previous practice shows that there is not much you can do about this situation, we stress it’s not all that black and white. Here’s what you can do if your exchange of choice exit-scammed, locked you out of your funds, doesn’t let you withdraw your funds, closes their website and etc.
1. Contact your local authorities
The first thing you can do is to contact your local authorities. You go to your local police station and file a complaint about an internet fraud. From that point on, it is up to them if they want to get in touch with their international colleagues and address the situation. It’s almost the same practice what you would do if your bike got stolen or any other everyday theft. Of course, it is up to you if you want to help the investigation by actively getting involved.
2. Let everyone know of your situation publicly
Next, you can do a series of posts, blog posts, twitter threads about your particular case online. Use social media like Facebook, Twitter, LinkedIn, Reddit, Bitcointalk or any others. Make sure you tag in the subject which scammed you. Also, tag in your local authorities pages or profiles. Use hashtags like #scam #fraud and similar to raise more awareness of your situation. Also, make sure to attach any visual material you have. Try to find similar cases to yours and engage with other people who are in the same position as you are. Maybe somebody got further in the case than you and knows something you don’t.
3. Contact your bank
If you sent your funds to the exchange with the help of your local bank account, and these funds are 100% legal and you can prove it, you can contact your local bank. Contact them by explaining your situation and providing bank accounts or addresses where the money was sent. You can raise awareness by letting the bank know that this particular bank account defrauded you. This is done so that the bank can identify these bank accounts and probably interfere their future operations. Maybe they’ll even black-list this account.
4. File a complaint at the U.S. Commodity Futures Trading Commission
While the previous three options were related to your local authorities, this is where international authorities come in. CFTC is an international establishment and their mission is to protect users from internet scams. You can report a scam on their website. Their mission reads:
“The mission of the Commodity Futures Trading Commission (CFTC) is to foster open, transparent, competitive, and financially sound markets. By working to avoid systemic risk, the Commission aims to protect market users and their funds, consumers, and the public from fraud, manipulation, and abusive practices related to derivatives and other products that are subject to the Commodity Exchange Act (CEA)”
In this link you can report your scam exchange by describing the situation, telling about the firm/individual you are complaining about, telling about yourself, and the instruments that you used. Also, you can upload additional files which would help the investigation.
5. Federal Bureau of Investigation: Internet Crime Complaint Center (IC3)
Another international option is to file your complaint to the FBI special Internet Crime Complaint Center. Their mission is to ensure positiveness and safety environment in online advertising, freeware, mobile apps, and even virtual currency. In the past couple of years, the FBI IC3 Center has received thousands of complaints about more than $15 million stolen in crypto scams combined. You can file your complaint by filling out the complaint form.
Previously their primary focus was on Telephone, online advertising, phishing e-mails, and pop-up messages, but now they have involved cryptocurrency-related scams as well.
6. Better Business Bureau
BBB is a trust marketplace where buyers and sellers trust each other. Although this company is mainly focused on U.S., Canada, and Mexico, it handles international companies and is willing to guide a scam victim through the process of filing a complaint. Also, they have their own database where you can search whether the company have any other complaints.
Just visit theirwebpage and follow the instructions.
7. USA.GOV’s Online Safety
Although you might not be from the United States, you can contact them to find out which exact agency you should contact for your specific case. The page consists of a few links of government authorities which could handle your case. They mention government authorities such as the FBI, the Federal Trade Commission (FTC), EConsumer.gov and the Department of Justice (DOJ). In addition, they have put out some pointers on how to protect yourself on the internet.
We contacted many lawyers and people who are connected with law and finance. They all say that you should better forget about your money/investment which you lost because there is literally nothing you can do. The main reason being that these companies have a hidden true beneficiary and they choose specific countries where to register. Mostly those are countries with high risk jurisdictions which aren’t cooperating with international organizations. In addition, it is relatively easy to become a licensed registered agent within these countries. The competition has grown fierce, costs have gone down, and it’s easy to start a reselling business and still offer attractive pricing while raking in a nice margin.
You can check the list of some of these countries here and here.
In this article we kind of proved the opposite. Actually, there is so much you can do. You can report a scam to these authorities. Those are your funds. Nobody likes to lose money. These cryptocurrency scam exchanges always seem legit judging by their UI and special offers they provide. That is a clear consumer deception, and the authorities should properly address these cases. Hey, at least it is better to sit around and do nothing about your money. Even if you will not get your funds back, you will have the feeling that you did everything you could.
Recently we covered a news story about BiteBTC.com. To recap – they announced that a fire had occurred within their data centers on new years eve and that all their main backup servers were destroyed. After this, a storm of negative user complaints fired about their accounts being inaccessible. They neither could access their accounts nor withdraw any funds. Above all, this happened three days before the annual Proof-of-Keys event, where users withdraw all their funds from exchanges to see the exchanges ability to provide solvency. Naturally, this raised a lot of suspicion about a possible exit scam. When we published the article, BiteBTC.com blocked us on Twitter. What kind of message does this send to us? Let’s see how far the situation has escalated up until now.
BiteBTC.com changes their legal address.
While browsing the bitcointalk.com forum, we found a senior user (subwoofer12) post who had noticed that bitebtc.com changed the footer of their front page. In order to confirm these claims, he demonstrated a couple of screenshots from the bitebtc.com website. Previously their footer, on which we based the information about their legal headquarters, was:
In contrast to the previous information, there is not much you can find about this new Seychelles location they have provided. It is an off-shore zone. Typically such companies go offshore to avoid taxes, money laundering, and corruption claims.
As subwoofer12 writes: “Perhaps trying to hide owner/shareholder information by incorporating in Seychelles, it’s a little bit late for that now.”
The owners of BiteBTC.com?
The user Subwoofer12 did very good work on finding information about this particular case. He managed to get the business profile of their company from the Accounting and Corporate Regulatory Authority (ACRA) Of course, this information could not be 100% accurate.
It shows that the owners of FINANCEFIRST PTE. LTD. are two Singapore citizens Ng Chee Siang (The director) and Sim Zi Chao (The secretary).
Also, subwoofer12 found a little of background information on these two guys, he writes:
“If these two want to resolve the situation you can start by returning all the money that you’ve stolen from your customers There’s a chance these are the wrong people, but I’m almost sure that I’m correct. Both of them have an interest in finance, they used to run this blog together https://investmentstab.blogspot.com/ Viewing post activity on LinkedIn shows them liking topics related to Blockchain It seems that they met each other while interning at the Bank of America in Singapore, looking at their work history on LinkedIn the periods of time match up.”
We do not assure that these are the people behind BiteBTC. We are only portraying what is available on the internet and what people are claiming.
BiteBTC.com now is asking for 0.01 BTC deposits to restore accounts!
The bitcointalk.org forum thread on this case was quiet for a while, but a few days ago a user westbanker posted an image which shows that the official BiteBTC support e-mail asks for a 0.01 BTC deposit to rectify his account.
If this is true, then this is an absolute madness!
Here is a e-mail conversation from with westbanker and the BiteBTC.com support:
“Me: When are my funds going to get restored to my account? I have been waiting almost 2 months.
Them: We will have to rectify your account for that Once we rectify your account Your issue will be resolved immediately. Reply us back so we can tell you the procedure to rectify your account!
Me: How do we rectify my account?
Them: You will have to make a deposit of 0.01btc to the rectification wallet address we will provide for you to rectify your account. Once we rectify your account the btc will be refund back to you and after that your issue will be resolved immediately. Reply us back so we can provide you the rectification wallet address to deposit into!
Me: I habe to give you money to get my money back? No, that’s not how this works. You are scamming people. Give me my fucking money back
Them: We’ve nothing to do with your money Just to rectify your account Then once we do that Your money will be refund back to you immediately
Me: Why do I have to send you money to get my money back? Please explain that to me
Them: The btc is for us to rectify your account so that your issue can get resolved We’ve nothing to do with your money It will be refund back to you once the rectification is done
Me: Explain exactly how you need more money to rectify my account.
What are you spending money on to rectify your own files?
Them: It’s not your work It’s our work okay! If you want your issue to get solved You do what we asked you to do Or you leave And your issue will never get resolve”
It’s not your work; You do what we asked you to do, or leave… Wow, this looks like a great example of how you should never communicate with your clients.
As I mentioned above, BiteBTC Twitter blocked Best Coin Investments after we published the article. But as we all know – that cannot stop us from accessing their content. The strange thing is – they are operating like nothing would’ve happened. They’re making airdrop auctions, showing-off that they now have $100M in daily volume, and posting information on newly listed coins. However, every single post has at least one user saying that you should definitely read more about this exchange, and even more users asking for a refund.
But this tweet is just literally something out of this world:
Apparently, their Twitter manager has no idea that there isn’t such thing as a February 30.
Go check it out yourself. You will soon discover not to do any business with this exchange because of the bad reviews. Lots and lots of users are advising not to use this exchange.
Fraudulent token listing
While regular users are waiting for their refunds, BiteBTC successfully operates in listing new coins. However, there are claims of some ICO projects that BiteBTC has collected the listing fee, but somehow failed to pass the exchange’s verification process. Needless to say that they also haven’t received a refund.
“Dear Globycoin Team, Thank you for your response! We’ve received your payment and forwarded your request to our developers. Your coin will be listed within 5 business days because of a queue. I will inform you in 24 hours about your listing. Additionally, we can list your coin within 24 hours for additional 0.1 btc Premium Listing fee or within 48 hours for additional 0.05 btc Express Listing fee. Additionally, I would like to offer you to run Airdrop to attract more traders to your coin. Please check some of our previous campaigns: https://twitter.com/bitebtccom/status/983671610594025473– 1K participants in less than 2 days; https://twitter.com/bitebtccom/status/994578155926106112– 400 participants in less than 12 hours. I’ll be glad to offer you special conditions and run your airdrop within 1 week. Thank you for being a part of BiteBTC community!”
– Response to Globycoin
So it looks like they are mainly living off of ICO listing fees. Also, Best Coin Investments is not the only one who got blocked by them on Twitter.
“We Team EGEM paid the listing fee and got “listed” but none of our coin holders could trade. When I asked Steven (the sales rep) about this he offered to sell me “Market Making services” – how is that for a scam. We complained on their twitter and alerted the other coins that were paying the listing fees and got blocked”
From our perspective, this looks like a 100% scam. The communication with users is beyond any criticism. They claim that they have started coin redistribution, but somehow, nobody has received it.
Some users claim that the owners are arrested in Singapore, but that is unofficial. However, that might be the reason for deleting the trade history of all the users. Also, they moved their company to Seychelles, which is very strange.
What is even more shocking, not mentioning the “You do what we asked you to do or you leave” comment, is that one of the solutions that they provide their users is registering again and trading with no initial balance. “You can open a new trader account, pass the KYC verification with the same photo id and start trading with no initial balance.”
Bitcointalk.org users claim that they have not received any refunds as BiteBTC.com claims.
Also, users from bitcointalk are submitting requests to CoinMarketCap to delist the exchange, in order to stop them.
This is unbelievable how an exchange with this kind of reputation can still manage to operate. It could be that all those accounts which are engaging with them are fake, just to make the exchange seem live. Hosting airdrops just for twitter engagement seems odd as well. We all know that the air-drop hunters don’t care what, who or where, “just gimme the damn coins”. But a new low for the cryptocurrency exchange business would be the combo of scamming users and ICOs as well. It looks like they feel so infamous at this point.
Needless to say that people are engaging with the police to stop this madness.
Update: We received an e-mail from one of the BiteBTC customers who also suffers from the exchange. He told us that only 3 days ago the exchange stole 0.45 BTC from him. Their excuse is that he had violated the terms and conditions. However, the user says he didn’t violate any rules, they just blocked him! He cannot access his account and judging by the e-mail he received from BiteBTC, this is their final decision. This is the e-mail he received:
If you are a victim of BiteBTC or have some useful information about this particular subject, contact us at email@example.com, or send an e-mail to a group of people who share the same negative experience with BiteBTC at firstname.lastname@example.org.
The FBI is asking investors to assist in the investigation of the financial pyramid BitConnect. It was one of the most talked about investment schemes of the recent Bull-market of 2017. Eventually, it led investors to lose billions when the company exit-scammed in January 2018.
The financial pyramid that collapsed
According to the FBI, BitConnect Coin launched in 2016. One year after the ICO was in progress, the cryptocurrency value was over $2.5 billion. Also, the law enforcers report that BitConnect guaranteed investors up to 10% return of their investments, on a month-to-month basis.
In January 2018, the BitConnect Coin market collapsed. Regulators sent letters to investors warning of participation in the project, stating that it was a financial pyramid. Soon the company stopped operating, and investors remained in the hands of a “virtually useless” cryptocurrency.
One of the BitConnect promoters is already behind bars
By previous reports, one of the main BitConnect promoters – Divyesh Darji, is already behind bars in the city Gujarat. As he was returning from Dubai, the Gujarat Criminal Investigation Department arrested him.
“Darji was living in Dubai. He was under a look-out circular. The Immigration Department alerted us when he was on the way from Dubai to Ahmedabad, after which he was arrested today evening. The company came into existence in 2016, and in 2017, it launched the BitConnect coin. It remained active till January this year […] The accused held seminars, events in India and other countries promising high interest — daily interest rate of 1 percent — on investment in BitConnect coins. The cost of one BitConnect coin on January 16, 2018, when the company shut down, was $362”, said the inspector P G Narwade of Criminal Investigation Department (CID-Crime) of Gujarat police.
Fill out a brief questionnaire if you suffered from BCC
However, the law enforcers did not simply establish contacts with investors who became victims of the scheme. According to FBI estimates, investors lost a total of between $2.5 and $3.5 billion. The Specialist Service appealed to citizens with a request for assistance in investigations:
“If you invested in BitConnect, please complete this brief questionnaire. Your responses are voluntary but would be useful in the federal assessment of this matter and to identify you as a BCC investor and/or potential victim. Based on the responses provided, you may be contacted by the FBI and asked to provide additional information.”.
Recent news shows that CONSOB (Commissione Nazionale per le Società e la Borsa), an Italian securities regulator, just added Togacoin to its “scam black-list”. The main reason is that Togacoin and two other companies were failing to obtain authorization to operate in Italy.
What is Togacoin?
Togacoin claims that they have been operating with hosting services and web development for many years. They are trying to separate mining operations from electricity costs. Also, they are working on diversifying investments to make the business safer from market variables.
“This guarantees a complete payout to the token holders: in case mining become no longer profitable, it will be gradually replaced by our other activities (hosting/housing, application design/development, and electricity sales),” says in their website.
“Promises” of huge returns
Within their website, they have a Revenue Calculator. It generates a huge return of 239% in one year and 654% in three years. That seems a bit too high judging by the current mining situation in the crypto-space. This reminds the height of absurdity which was going on during 2017, with the ICO craze. That would be interesting to see exactly how hosting, application design and electricity sales will cover up these huge returns. However, they have a disclaimer above the calculator:
In their Telegram feed which has a little more than 2,500 users, people started asking questions about the recent news. A chat administrator with a nickname “Sofia” replied to these allegations. She says that the appellation “Scam Blacklist” is incorrect as there is no such thing.
“We had a warning from CONSOB back at the end of October, stating that we were suspended from offering our tokens in Italy as they consider them a regular financial offer, so we decided to ask our hosting provider to block all Italian IPs to avoid any further issues,” she clarifies.
All this fuss is only about Togacoin being restricted to sell their tokens within Italy. Their company offer is “not suitable for the Italian public”. Sofia also states that Togacoin team haven’t lost a single payout since the start of their project. Moreover, they “will continue to work as hard as humanly possible to reach the softcap and make our project a reality”.
Togacoin Contacted Cointelegraph
As Togacoin is backing these scam allegations, they are in contact with Cointelegraph(CT), which initially posted the reputation-damaging article. Apparently, Cointelegraph didn’t contact any of the company officials to clarify the information. Sofia expresses disappointment with CT. She claims that they haven’t done proper research before publishing the article.
Moreover, Luca Puppi, the co-founder of Togacoin explains that they did the Revenue Calculator calculations when the price of 1 Bitcoin was $8500. Excusing that “as this [Bitcoin] price varies daily it is impossible to keep the calculator updated constantly.” He also comes clean about the communication with CONSOB:
“Back at the end of October, Consob issued a warning in which they asked us to suspend the offer of our Token to the Italian public (‘as a precautionary method for 90 days’ was said by Consob) unless we solicited an authorization. As was requested, we asked our hosting provider to block all Italian IPs in order to avoid any further trouble.”
No such thing as a Scam Black-list
Luca states that there is no such thing as a scam black-list, nor has ever existed. He ensures the unauthorized services of Togacoin within Italy’s boarders. When visiting the provided website of CONSOB it also shows no such term as “scam black-list”. It reads that CONSOB prohibited Togacoin and refers to the information already provided by Luca. Togacoin willingly agreed on suspending Italy from their business services.
All we have to say to the team of Togacoin is – guys, update the data of your calculator and website in general. The last time Bitcoin was at $8,500 was in May 2018. That is in case you want to avoid any more scam accusations because these numbers at this bear market period are looking absurd.
Recently we reported that BiteBTC experienced a fire within their data centers in Singapore. We immediately sent our reporters to Singapore to check out the situation. It appears that there was no fire recorded. Also, BiteBTC headquarters are located in an apartment building, referring to their company address 553 SERANGOON NORTH AVENUE 3, SINGAPORE provided by opencorporates. It looks like it might be a scam.
Locals say that no fire reported
Since our reporters found out that their headquarters is an apartment building, they went off in the streets of Singapore to ask its residents about any news of the fire. Locals responded negatively, saying that if there actually were a fire, it would most definitely be covered by local newspapers and televisions. Singapore is very open to their residents. They have a perfect society, well-planned infrastructure and they want its residents to feel safe. This raises suspicion about the authenticity of the news BiteBTC.com provided on their website.
BiteBTC official address – an apartment building?
Although this might be true, and that could be a formal address, this only strengthens the suspicion regards the exchange being a scam. According to opencorporates.com, the registration number coincides with the number provided on their website. This information was contributed by an individual user. Unfortunately, we couldn’t find any additional information about the company.
Huge daily volume
However, at the time of writing, according to coinmarketcap.com, they are operating with $70 million, which is equivalent to 17,407 BTC and rising daily volume. While writing this article the daily volume increased to $72 million, which is outrageous!
That is a lot of money, and I doubt that a company which handles so much of users funds could live off only with a formal address, located in an apartment building. Moreover, they haven’t specified the address of their data centers which caught the “fire”.
Users constantly reporting scammy characteristics
Since the announcement of a “fire”, their Twitter page is constantly flooded with users complaints. Despite users being so frustrated, they haven’t communicated regards their issues. They only keep adding coins to their exchange. On the same day when they announced the fire, they added Inmax (INX) token.
Twitter on fire
Since then every twitter post they have had is tampering with accusations of a scam. Users say that they cannot log in on their accounts, that they are locked and have disappeared. Also, reports of 2FA not working are up in the air. Needless to say that the exchange hasn’t replied to any of these comments.
Countless users lost their funds
It all started in a CCN article, in which a user wrote to CCN stating that he has lost about 2 BTC:
“Not sure who to talk to about this. Bitebtc.com closed its doors and stole everyone’s coins, even mine. I had a lot with this exchange. I’m in tears right now. I cannot log into their website at all. I have lost about 2 bitcoins. I’ve never been this sad. How can an exchange based in Singapore steal $67 million and disappear ?? I filled out the form on the contact us page as requested in their latest news update with the fire. I sent that Jan. 3, after visiting their website that day when I tried to sign in and realized the system continuously said I did not have an account on there. That’s when I knew. I clicked ‘News’ on their header section and seen the latest news of the fire that apparently took place. I have not heard from bitebtc.com yet and I do not think I will. This is not fair at all.”
Many users claiming that their funds are lost.
Judging by their Twitter, this looks like a total disaster. Sorry for all the traders who deposited in the exchange, and now can’t access their accounts.
Lack of communication
The total lack of communication on Twitter is yet another sign of an exit scam. Not a single response to its users by the exchange. This is a common exit scam strategy.
What is weird is that their daily volume is increasing over the days. This might be due to their BTC/USD pairs which are trading slightly over the market price. Hence, the price of one BTC on BiteBTC.com is $4,462, while the actual price is $4,055 at the time of writing. Many traders could be using this opportunity for arbitrage trading.
Posts coin redistribution roadmap and partial account restoration news
BiteBTC recently updated their website status saying that people need to fill out a form about coin redistribution. Also, claiming that “We managed to restore some of the accounts that were blocked”. However, there is no proof for this.
“We are not yet able to answer each one personally, although we are doing everything possible for this,” says on their website, “unfortunately, we have to admit that our specialists failed to recover part of the data from September 4, 2018, to January 1, 2019, including trades, deposits, withdrawals, orders, and some other information.”
Suggests to resent the KYC information
“If your account is not found, we ask you to re-register with the same e-mail address, and also upload KYC documents for the verification. After that, we ask you to examine the Coin Redistribution Roadmap and fill out a form: http://bitebtc.com/coin-redistribution If your account has been restored without balance and/or trading history, we also ask you to go through KYC verification and follow the Coin Redistribution Roadmap to recover your lost funds: http://bitebtc.com/coin-redistribution”
Is BiteBTC.com a scam exchange?
I would say yes because it totally meets all the exit scam characteristics. The total lack of communication on Twitter. Stating general information that no-one can approve. Countless unsatisfied users, lost funds, locked accounts. And above all, their official address is located in an apartment building. If the fire was real, as they claim, they should’ve provided the address of the data center which caught the fire and explain it more in detail. We at BestCoinInvestments strongly advise not to trade within this exchange and stay away from it as far as you can. They might do announcements for a while like it was in the case of CoinsMarkets.com until eventually, they stop coming and the website is down.
If BiteBTC.com can back up all these claims in this article, or maybe even wants to do an explanatory interview, please contact us at email@example.com so we can explain the situation to all the traders and investors.
Just recently, judging by a twitter thread by Trace Mayer (@TraceMayer), HitBTC disabled Bitcoin withdrawals on January 1st. That comes just before January 3rd when the Proof of Keys event will take place, organized by Trace Mayer himself. He writes:
Just now HitBTC replied to Trace Mayer’s twitter post saying: “We believe we didn’t. Let us assist your friend in this. We encourage him to do the following: 1. Click the “this form” link; 2. Find out what’s the hold up; 3. Receive help from our team; 4. BEWARE!! (optional step, if still necessary).”
Proof Of Keys
This movement, organized by Trace Mayer, is meant for crypto traders, who use third-party services to store their crypto assets. It happens every January 3rd, and the purpose is to test out the solvency of crypto exchanges. This way traders can detect whether these third-party exchanges hold the funds that they are theoretically storing.
Also, just a day ago, Reddit user “pedxs” posts a complaint saying that his funds have been frozen multiple times. “Six months ago my account got suspended. After months of sending 40 plus emails, HITBTC finally unfroze my account. I immediately withdrew most of my funds, but left a small amount to day trade. I did that because HITBTC promised that “No further automated restrictions will be applied,“” he writes continuing, “with the proof of key date approaching, I felt that HITBTC is the prime suspect for being insolvent, so I tried withdrawing my BTC. Guess what, they blocked the withdrawal and froze my account again.”
Even more, since then many users shared their experiences with HitBTC, and generally speaking – they are not that flattering. A twitter user @Kadieron writes: “I hate HitBTC. They stole $1200 from me, which is a lot in my circumstances.” Also, @Hugo2569 writes that “users [of HitBTC] can tell that message is not unusual on that exchange…”
Signs of a Scam
Altogether, it is not clear whether they locked all users’ funds, or only these particular subjects’. But the fact itself that just before January 3rd, HitBTC locks the withdraw function, has raised suspicion.
Many tweeters say that the information about HitBTC is very stingy. However, a lot of users report that this is a common thing within the exchange: long withdrawals and sometimes frozen accounts. Contacting customer support always takes ages, and many suggest to avoid this exchange. Also, tweeters were mentioning claims of false volume within the exchange, but overall all these accusations are not proven, so they are more like a FUD (Fear Uncertainty Doubt) rumor.
Not your keys, not your Bitcoin
That is the main reason why Trace Mayer founded “Proof Of Keys” movement. We strongly advice not to use third-party exchanges to store your crypto assets. Users usually have no control over their keys, and the future of their investments solely lays on the exchanges shoulders. The exchange might exit-scam, they might declare bankruptcy, and one-sidlingly close accounts and freeze funds. The best way to store your Bitcoins is in cold storage, where you control the keys of your funds. Or use a DEX (decentralized exchange), but they are not that developed yet and hasn’t got the volume for day trading, so it’s obvious why most day traders go for more popular exchanges.
Divyesh Darji – the man behind the unbelievable crypto pyramid scheme scam called BitConnect (BCC), now is sitting in jail, as he was returning from Dubai. He and his team was scamming millions of dollars from naive Investors.
Gujarat Police department comments
“Darji was living in Dubai. A look-out circular was issued against him. The Immigration Department alerted us when he was on the way from Dubai to Ahmedabad, after which he was arrested today evening. The company came into existence in 2016, and in 2017, it launched the BitConnect coin. It remained active till January this year. […] The accused held seminars, events in India and other countries promising high interest — daily interest rate of 1 percent — on investment in BitConnect coins. The cost of one BitConnect coin on January 16, 2018, when the company shut down, was $362”, said the inspector P G Narwade of Criminal Investigation Department (CID-Crime) of Gujarat police.
“When this information emerged, Kumbhani and other BitConnect promoters came under the CID’s scanner. In January this year, Kumbhani and other promoters suddenly closed the exchange and became untraceable. Investors lost money as they could no longer withdraw or trade their BCC tokens or coins”, the CID said.
These are all good news, since I believe, the former investors are actively following the court process of BitConnect. And news like these are sending a good message to other past crypto scams. They might receive their judgement as well. At least now they (investors) can sit with a hope that BitConnect will receive a punishment they deserve.
SEC recently found a suspicious project called “Tomahawk Exploration LLC”. Tomahawk promised its investors to be an intermediary and convert their funds into the shares of the company specializing in oil production. The prices of oil would go up, and the investments would grow correspondingly.
The Commission has shut the company down with a fine of $30k, also the ex CEO of Tomahawk is not allowed to hold any leading positions of any enterprise or own any company shares.
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