Arbistar Bitcoin exchange is accused of running Bitcoin trading scam when $ 1 billion in investors’ funds cannot be accounted for
Arbistar Bitcoin exchange has just been accused of performing a fraudulent cryptocurrency exchange. The Spanish Prosecutor’s Office said it had preliminary findings showing that the project could not account for $ 1 billion of the investors’ money. The disappearance of investment funds affected 32,000 households.
Another exit-scam called Arbistar Bitcoin exchange?
Arbistar investors started having problems after the Bitcoin exchange abruptly froze user accounts before shutting down in September 2020. At the time, the executives at Arbistar claimed a major bug from their crypto trading bots. This has caused Arbistar to pay more than it actually was. In a statement shortly after freezing an investor’s account, Arbistar said the bug – which had not been discovered for nearly a year – caused the trading platform to fall into a financial hole.
Now, according to Spanish media reports, police in Tenerife, where Aribistar is headquartered to collect taxes, have opened investigations about the company. The police also want to know the destination of the lost money.
Meanwhile, some affected investors claimed the Bitcoin exchange was a Ponzi scam.
However, Arbistar’s director and owner, Santiago Fuentes, said the following:
“It was just a computer error that we had to deal with, liquidate, and continue with our business.”
Fuentes also admitted that up to 32,000 families were affected. Interestingly, Fuentes confirmed that he was hiding at an undisclosed location in Tenerife for security reasons. However, he denied the allegations that he had disappeared.
On the other hand, when asked about the actual amount of Bitcoin that cannot be accounted for, the director of Arbistar denied that nearly $ 1 billion worth of coins was missing. Instead, he claims that the actual value is not reached even one-tenth of what is speculated by some of those affected. According to Fuentes, the actual number of bitcoins that cannot be fully counted is likely to be around 10,000 BTC, or nearly $ 103 million.
Ultimately, Fuentes said he hopes that the scheduled launch of Arbistar 2.0 will ensure those affected will recover their investment in six or twelve months.
Another turning point in the story reappeared
Blockchain company Whitestream claims it discovered large withdrawals from Arbistar Ponzi’s wallet into Wirex and Coinbase since February 2020.
In a Twitter post on October 4, the Whitestream team said:
“An estimated 272.6 BTC were sent to Coinbase.com, and 272.1 BTC sent to Wirexapp.com during this month (February). More large amounts of BTC were sent to other exchanges.”
An estimated 272.6 BTC were sent to https://t.co/lijO4L6jGi, and 272.1 BTC sent to https://t.co/rgPHCOqBmY during this month. More large amounts of BTC were sent to other exchanges. (credit to https://t.co/PzjPkW4zdC for the chart that represent Arbistar activity in 2020). pic.twitter.com/9DZRKXbf6O
— whitestream – Blockchain Intelligence (@whitestream5) October 4, 2020
Whitestream has provided data (Bitinfocharts) showing evidence of the aforementioned balances at exchanges immediately following investor fundraising activities.
Whitestream CEO, Itsik Levy, said:
“After analyzing Arbistar’s activities on the Blockchain, we have determined that during the period of time Arbistar had an estimated 18,000 Bitcoin addresses that represent their customer deposits, they were involved in 17,500 transactions. Between July 2019 to March 2020, Arbistar received around 2,600 BTC $26,000,000.”
However, after the massive withdrawal in March 2020, Levy said it had observed Aribistar changed the Blockchain wallet infrastructure to achieve more privacy on the blockchain. The new wallet infrastructure is working until October 2020. However, the CEO said they are currently analyzing its new wallet structure to understand where the lost funds are.
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