Thursday, 21 September 2023

Crypto News

Bitget and crypto influencer embroiled in legal saga after ReelStar token listing fiasco

Bitget and crypto influencer embroiled in legal saga after ReelStar token listing fiasco

Update (Aug. 18 at 2:09 pm UTC): This article has been updated with both sides’ perspectives and additional information. Further commentaries are expected from both sides.

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 adviser to ReelStar, a startup developing a social media app for creators. As compensation, Luthra was offered Reel Tokens (REELT), the project’s utility token. Upon its listing, the influencer sold 1.3 million REELT tokens on Bitget. Luthra’s account was then frozen under suspicion of market manipulation. A spokesperson from Bitget told Cointelegraph about the decision:

“Bitget faced a manipulative attack by a group of traders attempting to profit by manipulating trades on the exchange. Their target was a new coin called REELT, which they tried to dump immediately after its listing on Bitget, causing a large drop in the coin’s price.“

Additionally, Bitget claims to have contacted the crypto influencer for an explanation: “In response, he admitted to selling the tokens. However, when we asked for the reasons behind this abnormal behavior, we did not receive active feedback or satisfactory response.“

Luthra claims innocence, citing 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 key executives.

“Bitget prevented me, a Fully KYCed user of their platform, from withdrawing my tokens,” Luthra stated to Cointelegraph, adding:

“After I sold this portion of my allocated tokens, my funds —including the crypto […] I already had on the exchange before REELT — were blocked, and the company stole what my tokens were worth for themselves.“

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