Evan Luthra, a businessman and prominent cryptocurrency figure, recently revealed on Twitter that he had filed a lawsuit against cryptocurrency exchange Bitget, citing the improper freeze of his account after the listing of the REELT coin.
Luthra, who has over 2 million followers on Instagram and approximately 100,000 followers on Twitter (X), claims Bitget’s actions infringed his rights and jeopardized his advising position in the ReelStar token project.
Luthra has filed a lawsuit against Bitget due to the disagreement, asking for $16 million in damages and the release of $200,000 that has been locked in Bitget’s account. “Overall, they stole more than $200,000 directly from me, and then many, many more millions indirectly,” he said .
However, these allegations and claims are nothing threatening to Bitget, who feel they have acted appropriately, having seen such “malicious actors” before.
Gracy Chen, managing director at Bitget, told CCN that there is “nothing particularly unique about this story, as it’s not the first time we’ve witnessed market manipulators attempting to recover their accounts following illicit activities.”
“The case of Evan Luthra is just another instance, highlighting the importance of intelligent detection tools and a well-organized security department for any cryptocurrency company. These measures are crucial to prevent financial losses caused by malicious actors,” she stated.
“Our internal investigation into the aforementioned matter was completed by Bitget in April of this year, and we have duly disclosed an exhaustive account of the circumstances in question during the same period,” Chen concluded.
Meanwhile, she added that Luthra’s proposed lawsuit “contains facts and FUDs.
She commented that the company previously disclosed the inquiry’s findings into the “abnormal trading behavior” of the REELT token back in April and the user compensation scheme.
Chen added that user safety is Bitget’s primary focus and that the company strenuously disputes the claims made by Evan Luthra, whose fraudulent actions have previously been revealed by outlets like independent media and cryptocurrency journalist CoffeeZilla.
“We have not yet received any official court notices regarding this case. Additionally, we retain the right to sue anyone who spreads false information about our site”, Chen stated.
Regarding abnormal trading behavior by Reel Token (REELT) team, Chen reiterated the official Bitget’s statement and said that the company’s team noticed four accounts connected to the project team (three market-maker accounts and one advising account) had made a significant number of deposits and trades not long after REELT trading began.
These accounts quickly sold over 2 million REELT tokens, earning close to 400,000 USDT. The price of REELT also decreased at the same moment, falling from its initial opening price of 0.07 USDT to 0.028 USDT, a decline of more than 60%.
The Reel Token project team attempted to explain these anomalies as ‘typical’ market-maker activity in response to the Bitget team’s prompt communication with them. The majority of the orders in these accounts were sell orders, which defies market-making logic, as Bitget discovered. In addition, our neighborhood has frequently complained about shady dumping practices.
Due to these factors, Bitget stopped REELT trading on our platform temporarily since March 24, frozen the four accounts exhibiting unusual trading activity for additional research, and we continue to look into the causes of this unusual behavior.
Just for a reminder, Luthra’s involvement with ReelStar involved endorsing the initiative and earning payment in the form of REELT tokens. ReelStar is a startup that aims to create a blockchain-based social media tool for content creators.
In October 2022, 150 million REELT in remuneration was offered to Luthra to begin serving as ReelStar’s advisor. Before the IPO, Luthra acquired 7.5 million tokens in accordance with this, of which he sold 1.3 million on Bitget, a cryptocurrency exchange registered in the Seychelles.
However, Luthra insisted that he got permission from ReelStar’s CEO, Navdeep Sharma, to sell his tokens, and he denied any wrongdoing. He made it clear that his acts were not out of the ordinary and that other exchanges, including MEXC and Gate, had not objected to his token sales.
Chen confirmed the official statement regarding allegations that Bitget stole $200K.
The company stated that following its research, it thought that the aforementioned account had engaged in questionable trading practices on Bitget.
Four Bitget accounts were temporarily blocked for engaging in suspicious trading practices, the exchange stated on March 31.
In particular, it was found that four accounts connected to the REELT team—three market-maker accounts and one adviser account—sold more than 2 million REELT tokens shortly after listing, causing the price of REELT to fall by 60% and sparking a lot of community concerns.
Luthra admitted to dumping during Bitget’s contact with him, and his account remained live for another two hours following the REELT listing.
He sold 1.18 million REELT in those two hours, making a profit of around 214,000 USDT. The exchange claimed this dumping was suspicious given that he is a REELT advisor, which prompted it to momentarily freeze the account.
Bitget stated that by April 20, 2023, it had paid out 478,093.38 USDT to the 568 impacted users, 60% of which came from Bitget’s own cash and 40% from the aforementioned accounts.
As of May 17, the 583 users who qualified for the Reel Token (REELT) compensation plan have all received their full pay . Now that the whole compensation has been calculated, Bitget said it totals 542,302 USDT, of which 60% came from Bitget’s own cash and 40% from the four accounts connected to the project.