Bitget, a leading Seychelles-based crypto derivatives exchange, has dispelled circulating claims that it illegally stole thousands of dollars from investors of reel token (REELT). The exchange highlighted that it had to freeze accounts belonging to the REELT team due to suspicious activity.
Bitget disclosed this in an emailed statement to crypto.news. According to the exchange, suspicions of an exit scam scheme emerged after the team behind REELT allegedly dumped their REELT tokens shortly after Bitget listed the asset on March 23.
The platform revealed that the massive dump triggered a 60% decline from the asset’s opening price of $0.07. Data further suggests that REELT collapsed from $0.1507 at 9:35 AM (UTC) to $0.02802 at 5:25 PM (UTC) that day, marking an 81% drop in eight hours.
Bitget noted that it received numerous user complaints of a dumping scheme after it listed the reel token. To act on the matter, the exchange disclosed that it froze four accounts belonging to the REELT team, with one of the accounts belonging to Evan Luthra, a prominent blockchain expert and investor who serves as one of the advisors of the REELT team.
The Bitget team disclosed that Luthra and the REELT team have not responded to requests for cooperative work in resolving the situation.
Accusations of scam activity
Evan Luthra took to Twitter on March 31 to call attention to an alleged scam activity carried out by Bitget, as previously reported. According to Luthra, the platform “illegally stole” $200,000 from him and froze his assets without stating any credible reason.
In a recent thread of tweets, Luthra claimed his account was frozen the day before REELT trading started, with up to $200,000 worth of his REELT and moonriver (MOVR) deposits withheld. He alleged that Bitget sold millions of tokens the following day, as trading began. He further noted that over 300 users have complained of having their assets frozen.
Luthra claimed that efforts at contacting the Bitget team on the matter were unproductive. He went on to highlight several reasons why he believes the exchange is likely to encounter the same fate as FTX, such as having 50% of its reserves in its native token as well as the $8 million hack targeting BitKeep, a non-custodial wallet acquired by Bitget last month.
The exchange, in its turn, claims that Luthra made a profit of roughly $214,000 in just two hours after the trading opened. Bitget’s spokesperson claimed that Luthra sold 1.18 million REET coins.
Moreover, Luthra told crypto.news in a message that Sandra Lou, the CEO of Bitget, is just a “dummy placement.” He added that Lou doesn’t have any background in the web3 space.
Luther claims that Bitget has the most reel tokens and is “manipulating the price themselves.” He added that the exchange has blocked trading of REELT for others while freezing 300 more private accounts. The 28-year-old entrepreneur argued that the platform has been dumping its tokens on its users.
Bitget’s acquisition of a controlling stake in BitKeep was driven by the platform’s recent penchant for growth. Shortly after the acquisition, Dragonfly, a crypto-focused VC company, poured a $10 million investment into Bitget to support the platform’s expansion.