Brazil-based cryptocurrency investment platform Bluebenx lost more than $31 million last week after suspending withdrawals due to an alleged hack. The company announced it would stop withdrawals for at least six months. The company was investigated by Brazil’s Securities and Values Commission (CVM) in January.
Bluebenx halts withdrawals, allegedly lost over $310,000 in hack
Brazilian cryptocurrency investment platform Bluebenx suspended withdrawals from its platform last Thursday, affecting about 2,500 customers in the process. According to Assuramaya Kuthumi, a lawyer for Bluebenx, the company claimed it was the victim of a hack that cost them more than $31 million.
The company wrote an email to customers on Friday explaining the reason for the withdrawal. Email coverage:
Last week we suffered an extremely aggressive hack of liquidity pools on cryptocurrency networks, and after constant attempts to fix the problem, today we started our security protocol, immediately suspending operations of BlueBenx Finance products, including withdrawals , redemption, deposit and transfer.
However, no details were shared about the nature of the attack, but the communication did explain that the measures would be in effect for at least 180 days. On the same Thursday, the company laid off all its employees, according to a report from a former employee obtained by local source Portal do Bitcoin. More than 30 employees were fired, according to statements from former employees.
Reports of the hack, and how it coincides with mass layoffs at the company, have raised doubts about the real reason behind the suspension of withdrawals. Earlier this year, Brazil’s Securities and Values Commission investigated the company for allegedly offering unregistered securities as part of its investment portfolio.
The company offers high-yield investment products to attract clients to invest. These products offer up to 66% of investment funds locked up for one year, and according to client statements, some of these tools do not disclose the investment strategy behind them. An anonymous customer expressed concern about the future of funds held on the platform. He says:
I think there’s a good chance it’s a hoax, since the whole hack seems to be made up by them.
Other Brazilian companies have also accused hackers of stopping payments to customers. That was the case with Trust Investing, which also blocked customer withdrawals for nine months due to an alleged hack.
Brazil’s Congress is currently debating a bill that would impose tougher penalties for crypto-related crimes to deter companies and individuals from offering fraudulent products and pyramid schemes.
What do you think of Bluebenx and its alleged $31 million hack? Let us know in the comments section below.
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