Crypto influencer Evan Luthra has filed a lawsuit against crypto exchange Bitget for freezing his account and holding $200,000 in Tether (USDT) after a new token listing in March. According to Luthra, the exchange suspended his withdrawals and failed to provide clarification for their actions.
This incident is closely tied to Luthra’s involvement with the Reel Star project. He was hired as an advisor to the startup, which is developing a social media app for creators, and was offered Reel Token (REELT) as compensation. After the REELT token was listed, Luthra sold 1.3 million tokens on Bitget. As a result, his account was frozen under suspicion of market manipulation.
A spokesperson from Bitget explained that the exchange faced a manipulative attack by a group of traders attempting to profit from manipulating trades on the platform. These traders targeted the newly listed REELT coin and caused a significant drop in its price. Bitget claims that they contacted Luthra for an explanation, but did not receive satisfactory feedback or response.
Luthra maintains his innocence and claims that Reel Star co-founder Navdeep Sharma approved his token sale plans. He is seeking $16 million in damages, along with the $200,000 held in his account, in his lawsuit against Bitget, Foresight Ventures, and key executives.
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Bitget’s managing director, Gracy Chen, has previously announced an investigation into the case and disclosed the findings along with a compensation plan for over 500 affected clients. In a statement, Chen emphasized that user protection is their top priority and immediate action is taken against any illegal or fraudulent behaviors on the platform. At the time of her statement, Bitget had not been notified of the lawsuit.
In response to Chen’s statement, Luthra clarified that he was only an ordinary user who received tokens as compensation for consultation and should not be considered part of the project team.
Bitget issued a response on their blog, stating that they had communicated with Luthra shortly after the incident. The exchange explained that their investigation led them to believe that the account in question had been involved in suspicious trading behaviors on their platform.
The crypto community’s response to the lawsuit has been mixed. Some supporters of Luthra argue that the case sheds light on common issues faced by users of centralized crypto exchanges, while others believe that Bitget acted appropriately in protecting its users.
Prominent figures from the crypto community, including Binance CEO Changpeng Zhao, have weighed in on the matter. Zhao pointed out that Luthra should discuss the issue with Bitget directly and emphasized that Binance is not a regulator for other exchanges.
This case raises important questions about the relationship between crypto influencers, startups, and exchanges. It highlights the need for clear guidelines and communication to avoid such disputes in the future. Crypto exchanges must prioritize user protection and address any suspicious activities on their platforms promptly and transparently.
