Bitsane, the Irish-based cryptocurrency exchange, disappeared last week and may have swept away hundreds of thousands of users.
The exchange's users told Forbes that starting in May this year, Bitcoin, XRP and other cryptocurrencies could not be withdrawn. Bitsane's support team wrote in the email that the withdrawal feature was temporarily disabled for technical reasons. On June 17, Bitsane's website was offline, and its Twitter and Facebook accounts were deleted. Messages sent to multiple Bitsane mailboxes are returned because they cannot be delivered.
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(Bitsane's Twitter account no longer exists)
The victims communicated in the Telegram and Facebook groups, with more than 200 members. Most of these groups claim to have lost as much as $5,000. Forbes interviewed one of the American users and said that he had $150,000 worth of XRP and Bitcoin in Bitsane.
The disappearance of Bitsane once again proves that the cryptocurrency industry needs to get rid of its reputation as an unsafe asset class. This year, exchanges such as GateHub and Binance have been attacked by hackers, but exchanges that have completely disappeared without notice or explanation are much rarer.
As of May 30, the number of registered users of the Bitsane website was 246,000. CoinMarketCap's data shows that as of March 31, the company's daily trading volume was $7 million.
The US user who lost $150,000 requested to remain anonymous:
"I want to change XRP to bitcoin or cash, but the system always prompts 'temporarily disabled'. I immediately found a problem. I later wanted to check the order to see if it was still there, and then I couldn't access Bitsane."
In the late 2017 and early 2018 cryptocurrency enthusiasm, Bitsane attracted a large number of investors, because it can buy and sell Ruibo's XRP, XRP has not yet launched on Coinbase. On January 2, 2018, CNBC published an article entitled "How to Buy the Most Popular Bitcoin Competitor XRP", which explains how to buy Bitcoin or Ethereum on Coinbase and transfer it to Bitsane. Then convert to XRP.
Three of the five Bitsane users interviewed by Forbes learned about the exchange through CNBC articles. Ripple has also listed Bitsane as one of XRP's trading options on its website. The Ripple spokesperson did not respond to the request for comment.
Bitsane was officially launched in November 2016. Its CEO, Aidas Rupsys, registered Bitsane LP in Dublin and CTO Dmitry Prudnikov. Prudnikov's LinkedIn account has been deleted and it is currently not possible to contact the two responsible persons.
(Prudnikov's LinkedIn account has been deleted)
In August 2017, Maksim Zmitrovich established a company in the UK, Bitsane Limited. He wants to own the intellectual property of the Bitsane part of the code and use it for a trading platform that his company Azbit is creating. Zmitrovich said that Bitsane's developers insisted that their exchange name be written on the new legal entity he was creating. But Azbit did not end up using Bitsane's code because the relationship between the two was never reached and Bitsane Limited did not provide any services to Bitsane LP.
On May 16 this year, Bitsane Limited applied for dissolution because Zmitrovich did not use the company for any activities, and the company's registration was also in need of renewal. Some of Bitsane’s victims have discovered the public document and suspect that Zmitrovich is also involved in the scam, but he insists that his allegations are unfounded. He said that he had not contacted Prudnikov for at least five months – Prudnikov was in charge of negotiating with Azbit. On June 13th, a media blog post about the Bitsane scam was written to illustrate that Bitsane Limited was not involved.
"I'm fed up with these accusations. This company doesn't even have a bank account."
The whereabouts of Bitsane LP employees and user funds remains a mystery, and the victims don't know what to do next. A number of users from the United States said they have filed with the FBI and they are worried that their funds will disappear forever.