Crypto influencer Evan Luthra has brought a lawsuit against crypto exchange Bitget for freezing his account after a new token listing in March. According to Luthra, the exchange suspended his withdrawals, and froze $200,000 in Tether (USDT), while attempts to seek clarification went unanswered.
Luthra’s involvement with the ReelStar project serves as a backdrop to these events. The influencer was hired as an advisor of ReelStar, a startup developing a social media app for creators. As compensation, Luthra was offered REELT tokens, the project utility token. Upon its listing, the influencer sold 1.3 million tokens on Bitget. Luthra’s account was then frozen under suspicion of market manipulation. Bitget explained the decision in a blog post saying:
“On March 31st, we announced that four Bitget accounts have been temporarily frozen for involvement in suspicious trading behaviors. Specifically, we discovered four accounts associated with the REELT team (three market-maker accounts and one advisor account) sold more than 2 million REELT tokens soon after listing, leading to a 60% drop in the REELT price, as well as a number of complaints from the community.”
Luthra claims innocence, citing the ReelStar CEO Navdeep Sharma’s alleged approval of his token sale plans. The influencer now seeks a substantial $16 million in damages, along with the $200,000 held in his account. His lawsuit encompasses Bitget, Foresight Ventures, and their key executives.
Gracy Chen, Bitget’s managing director, said the exchange previously announced its investigation’s findings on the suspicious activities, as well as a compensation plan for more than 500 clients using both the company’s own funds and funds from frozen transactions.
“At Bitget, user protection is our top priority. When we detect any illegal or fraudulent behaviors on our platform, we take immediate action,” she wrote in a post on Aug. 4, saying the exchange had not been notified of the lawsuit.
Some recent news mentioning a potential lawsuit about us from one advisor of REELT project, contains both facts and FUDs. Regarding the “abnormal trading behavior” of the REELT token back in April, we have announced the investigation results and user compensation plan in our…
— Gracy Chen @Bitget (@GracyBitget) August 5, 2023
Magazine: Deposit risk: What do crypto exchanges really do with your money?
