Evan Luthra says Bitget froze his account in April. The exchange claims it was done on suspicions of market manipulation related to the sale of REELT tokens.
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 Reel Star project serves as a backdrop to these events. The influencer was hired as an adviser to Reel Star, a startup developing a social media app for creators. As compensation, Luthra was offered Reel Token (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. Regarding the decision, a spokesperson from Bitget told Cointelegraph:
“Bitget prevented me, a fully KYCed [Know Your Customer] user of their platform, from withdrawing my tokens,” Luthra stated to Cointelegraph, adding:
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
In response to Chen, Luthra noted that he was just an “ordinary user who received the tokens as compensation for a consultation” and should not be considered part of the project team.
I am an ordinary user who received tokens as compensation for consultation, just as you received tokens for listing.
Holding me responsible for the price drop or considering me a part of the project is an unreasonable assumption. I am no more involved in the project than you…
— EvanLuthra.eth (@EvanLuthra) April 6, 2023
In a blog post, Bitget issued a response to the event and said it was in communication with Luthra shortly after the event took place. The exchange explained the reasoning behind its actions: “After our investigation, we believe the account mentioned has been involved in suspicious trading behaviors on Bitget.“
On X (formerly Twitter), crypto community members expressed mixed reactions to the lawsuit. While some of Luthra’s supporters observed that the case exposes common issues faced by users of centralized crypto exchanges, others claimed otherwise, saying Bitget acted correctly by protecting its users.
Several prominent figures from the crypto community jumped in to have their say on the matter, including Changpeng Zhao, the CEO of Binance.