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Bluebenx, a Brazil-based cryptocurrency investment platform, suspended withdrawals last week due to an alleged hack that saw the company lose more than $31 million. The company announced that the withdrawals would be stopped for at least six months. The company has been investigated by the Brazilian Securities and Exchange Commission (CVM) in January.
A Brazilian cryptocurrency investment platform, Bluebenx, halted withdrawals on its platform last Thursday, affecting around 2,500 customers in the process. The company claims it was the victim of a hack that cost it more than $31 million, according to Assuramaya Kuthumi, Bluebenx’s lawyer.
The company wrote an email to customers last Friday explaining the reason for the withdrawal. The email reported:
Last week we suffered an extremely aggressive hack in our liquidity pools on the cryptocurrency network, after incessant attempts at resolution, today we initiated our security protocol with the immediate suspension of the operation of BlueBenx Finance products, including withdrawals, redemptions, deposits and transfers.
However, no details were shared about the nature of the attack, but the communication explained that these measures would be active for at least 180 days. That same Thursday, the company fired all its employees, according to reports from a former employee obtained by Portal do Bitcoin, a local source. Over 30 employees were dismissed, according to statements from the former employee.
The report of the hack, and how it coincided with the mass layoffs at the company, has raised suspicions about the real reasons that caused this withdrawal suspension. The company was investigated earlier this year by the Brazilian Securities and Exchange Commission due to an alleged offering of unregistered securities as part of its investment portfolio.
The company offered investment products with high returns to entice customers to invest. These products offered up to 66% for having invested funds locked in for a year. Some of these instruments did not disclose the investment strategy behind them, according to client statements. An anonymous customer expressed fear for the future of the funds on the platform. He stated:
I think there is a high probability that it is a scam because this whole hacking thing seems like something they made up.
Other Brazilian companies have also alleged hacks to stop paying their customers. This is the case with Trust Investing, which also blocked withdrawals for its clients for nine months due to an alleged hack attack.
The Brazilian Congress is currently debating a bill that would establish stricter penalties for crypto-related crimes to discourage companies and individuals from offering fraudulent products and operating pyramid schemes.
What do you think about Bluebenx and its alleged $31 million hack incident? Tell us in the comments section below.
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