Brazilian Crypto Investment Platform Bluebenx Suspends Withdrawals Amid Hacking Allegations – Exchanges Bitcoin News
Bluebenx, a Brazil-based cryptocurrency investment platform, suspended payouts last week over an alleged hack that left the company more than $31 million. The company announced that it would stop making payments for at least six months. The company was investigated by Brazil’s Securities and Values Commission (CVM) in January.
Bluebenx halts withdrawals and allegedly loses over $31 million through hacking
A Brazilian cryptocurrency investment platform, Bluebenx, suspended withdrawals on its platform last Thursday, affecting about 2,500 customers. According to Assuramaya Kuthumi, Bluebenx’s attorney, the company claims to have been the victim of a hack that cost it more than $31 million.
The company emailed customers last Friday explaining the reason for the withdrawal. The email reported:
Last week we suffered a very aggressive hack in our cryptocurrency network liquidity pools. Today, after incessant attempts at resolution, we have started our security protocol with the immediate suspension of the operation of BlueBenx Finance products, including withdrawals, redemptions, deposits and transfers.
However, no details were given about the nature of the attack, but the notice stated that these measures would be active for at least 180 days. On the same Thursday, the company laid off all of its employees, according to reports from a former employee obtained by Portal do Bitcoin, a local source. According to the former employee, more than 30 employees were made redundant.
The report of the hack and how it coincided with the mass layoffs at the company has raised suspicions as to the real reasons that led to this payout suspension. The company was under investigation by Brazil’s Securities and Values Commission earlier this year for an alleged offering of unregistered securities as part of its investment portfolio.
The company offered high-yield investment products to encourage clients to invest. These products offered up to 66% locked invested funds for a year. According to customer statements, some of these instruments did not disclose the investment strategy behind them. An anonymous customer said they had concerns about the future of funds held on the platform. He explained:
I think there is a high possibility that it is a scam because this whole hacking thing seems like something they made up.
Other Brazilian companies have also claimed hacks to stop paying their customers. Such is the case with Trust Investing, which also blocked withdrawals for its clients for nine months due to an alleged hack.
The Brazilian Congress is currently debating a bill that would provide for tougher penalties for crypto-related crimes to discourage companies and individuals from offering fraudulent products and operating pyramid schemes.
What do you think of Bluebenx and its alleged $31 million hack incident? Tell us in the comment section below.
Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late in the game and entered the cryptosphere when the price surge took place in December 2017. He has a computer engineer background, lives in Venezuela and is socially affected by the cryptocurrency boom. He offers a different take on crypto success and how it’s helping those who are unbanked and underserved.
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