Cryptocurrency influencer Evan Luthra has initiated a legal battle against Bitget, a crypto exchange, alleging the freezing of his account following a new token listing in March.
Luthra asserts that his withdrawal requests were halted and approximately $200,000 in Tether was locked up while his attempts to gain clarity were met with silence.
This incident is intertwined with Luthra’s association with the Reel Star project.
He had been engaged as an advisor to Reel Star, a startup dedicated to a social media app for content creators.
As part of his compensation, Luthra received Reel Token (REELT), the project’s utility token. Following its listing, Luthra sold 1.3 million REELT tokens on Bitget.
However, this action led to the suspension of his account over suspicions of market manipulation.
Bitget’s spokesperson disclosed, “Bitget faced a manipulative attack by a group of traders attempting to profit by manipulating trades on the exchange.”
Bitget claims to have reached out to Luthra for an explanation, but despite admitting to the token sale, he reportedly failed to provide a satisfactory reason for the behavior.
Luthra contends his innocence, referencing alleged approval from Reel Star’s co-founder Navdeep Sharma for the token sale.
Seeking $16 million in damages and the release of his $200,000 held by Bitget, Luthra filed a lawsuit against the exchange, Foresight Ventures, and key executives.
He argued that Bitget unjustly restricted his tokens, which he had acquired through legitimate means.
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Gracy Chen, Bitget’s managing director, stated that the exchange prioritizes user protection and undertakes immediate action against illegal activities.
Bitget unveiled an investigation into the matter, disclosing findings and a compensation plan for over 500 affected clients.
The exchange’s response clarified, “After our investigation, we believe the account mentioned has been involved in suspicious trading behaviors on Bitget.”
The cryptocurrency community exhibited mixed reactions on platforms like X (formerly Twitter). While some supported Luthra, highlighting challenges faced by users of centralized exchanges, others defended Bitget’s actions as protective of users’ interests.
Well-known figures within the crypto space, including Changpeng Zhao, CEO of Binance, also chimed in on the dispute.
At present, Bitget’s CEO Chen notes that the exchange was unaware of the lawsuit. Evan Luthra contends he was merely a token recipient for consultation and should not be deemed a part of the project team.
The ongoing case underscores the evolving complexities of the crypto landscape and the vital role of exchanges in maintaining security and fairness.
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