Bluebenx, a Brazil-based cryptocurrency investment platform, suspended withdrawals last week due to an alleged hack that cost the company more than $31 million. The company announced that withdrawals would be halted for at least six months. The company was investigated by the Brazilian Commission for Securities and Securities (CVM) in January.
Bluebenx stops withdrawals and would lose over $31 million in hack
A Brazilian cryptocurrency investment platform, Bluebenx, suspended withdrawals on its platform last Thursday, affecting around 2,500 customers in the process. The company claims to have been 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 stated:
Last week we suffered an extremely aggressive hack into our liquidity pools on the cryptocurrency network, after relentless attempts to resolve, today we launched our security protocol with the immediate suspension of operations of the products BlueBenx Finance, including withdrawals, redemptions, deposits and transfers.
However, no details were shared on the nature of the attack, but the communication explained that these measures would be active for 180 days, at least. On the same Thursday, the company fired all of its employees, according to information from a former employee obtained by Portal do Bitcoin, a local source. More than 30 employees were fired, according to statements by the former employee.
The report of the hack and the way it coincided with the massive layoffs in the company created suspicions about the real reasons that caused this suspension of withdrawal. The company had been investigated earlier this year by the Brazilian Securities and Securities Commission over an alleged offering of unregistered securities as part of its investment portfolio.
The company offered high-yield investment products to entice customers to invest. These products offered up to 66% for investing locked-in funds for one year. Some of these instruments have not disclosed the investment strategy behind them, according to client statements. An anonymous customer said they had concerns about the future of funds held on the platform. He stated:
I think there is a high probability that this is a scam because this whole hacking stuff looks like something they made up.
Other Brazilian companies have also alleged hacks to stop paying their customers. This is the case of Trust Investing, which also blocked withdrawals from its clients for nine months due to an alleged hacking attack.
The Brazilian Congress is currently discussing a bill that would establish tougher penalties for crypto-related crimes to discourage companies and individuals from offering fraudulent products and running pyramid schemes.
What do you think of Bluebenx and its alleged $31 million hacking incident? Tell us in the comments section below.
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