Crypto influencer Evan Luthra has taken legal action against cryptocurrency exchange Bitget following the suspension of his account. The move came after Luthra’s involvement with the ReelStar project and his sale of Reel Tokens (REELT) on Bitget’s platform. Luthra alleges that his account was frozen and withdrawals were suspended, amounting to $200,000 in Tether.
Evan Luthra had been advising ReelStar, a startup working on a social media app, and received REELT tokens as compensation. Following the token’s listing on Bitget, Luthra sold around 1.3 million REELT tokens. Bitget claims that Luthra’s actions were linked to a manipulative attack by traders looking to profit from the token’s listing.
Bitget’s Perspective: Market Manipulation and Communication
Bitget stated that a group of traders targeted the REELT coin, causing its price to drop by dumping it post-listing. Bitget froze Luthra’s account due to suspicions of market manipulation. When contacted for clarification, Luthra admitted to selling the tokens but failed to provide an adequate explanation for his actions.
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Luthra maintains his innocence, citing approval from ReelStar CEO Navdeep Sharma for his token sale. Luthra is now seeking $16 million in damages and the release of the $200,000 held in his account. His lawsuit names Bitget, Foresight Ventures, and key executives as defendants.
Bitget’s Investigation and Response
Bitget initiated an investigation into the matter and later disclosed their findings, along with a compensation plan for affected clients. The exchange utilized its own funds as well as those from frozen transactions to compensate more than 500 clients. Bitget emphasized its commitment to user protection and its immediate response to illegal or fraudulent activities.
The crypto community had varied responses to the lawsuit. Some supporters of Luthra argued that the case highlighted challenges faced by users of centralized exchanges. Others defended Bitget, stating that the exchange was right in protecting its users. Prominent figures in the crypto community, including Binance CEO Changpeng Zhao, also weighed in on the matter.