Following Coinroom, Bitsane is the second crypto exchange that has pulled an exit scam in the past three months, leaving up to 246,000 users as victims of fraud.
Image source: Facebook
It Started With a ‘Technical Issue’
Bitsane victims reported to Forbes that users had problems withdrawing cryptocurrencies from the exchange in May. In response to the issue, the operators of the platform sent out emails claiming that withdrawals had been “temporarily disabled due to technical reasons.”
On June 17, Bitsane users had to realize that the operators of the crypto exchange had lied to them as the platform had suddenly disappeared. Bitsane even deleted its Twitter and Facebook accounts, and users were unable to reach the exchange’s support team via email.
An archive of the vanished cryptocurrency exchange shows that it had 246,000 users and 25,000 daily transactions. While the operators reported these stats – so there’s a reason to suspect they are not entirely accurate –, CoinMarketCap shows that Bitsane had a daily trading volume of $7.2 million on March 31.
“I believe a major international crime has been committed. I have lost $7000 USD! What I know follows, there are many victims, please help. THEY HAVE STOLEN ALL OUR MONEY,” a victim of the cryptocurrency exchange stated on Facebook.
The victims of the Bitsane exit scam have formed groups on Telegram and Facebook to share their stories and discuss their options to reclaim their funds. Most users in these groups have reported that they had lost up to $5,000 in the exit scam, but one US customer stated to Forbes that he had $150,000 worth of bitcoin and XRP in his exchange account that he was unable to withdraw.
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“I was trying to transfer XRP out to bitcoin or cash or anything, and it kept saying ‘temporarily disabled.’ I knew right away there was some kind of problem. I went back in to try to look at those tickets to see if they were still pending, and you could no longer access Bitsane,” he told Forbes.
Bitsane Benefited From the XRP Bull Run
Bitsane attracted numerous users during late 2017’s and early 2018’s crypto bull market when XRP was one of the hottest coins.
A well-timed story on CNBC on January 2, 2018, that included a tutorial on how to buy XRP on Bitsane with bitcoin and ether bought on Coinbase, resulted in a massive influx of new users for the crypto exchange.
Bitsane even had a mention on CNBC, part of a ‘buy XRP’ tutorial in early 2018. | Source: Shutterstock
According to Forbes, three of the five Bitsane users the magazine spoke to discovered the exchange through the CNBC article.
The article, along with being listed on Ripple’s website as an available exchange, contributed to the fact that XRP was the most traded crypto on Bitsane (with a share of over 20% on March 31).
Earlier in June, CCN reported about a similar exit scam in Poland involving cryptocurrency exchange Coinroom.