Brazilian cryptocurrency lending site BlueBenx reportedly prevented any of its 22,000 users from withdrawing cash. The move is in response to an alleged BlueBenx hack that stole $32 million (or 160 million Brazilian real).
BlueBenx hack draws doubts
According to a local news site Portal do Bitcoin report, BlueBenx stopped all withdrawals after being the target of an “extremely aggressive” hack. Assuramaya Kuthumi, BlueBenx’s lawyer, claims that $32 million was lost due to the attack. Investors, however, found it difficult to believe given the vagueness of the purported breach.
“I think there’s a high probability of it being a scam because this whole hacker attack story seems like a lot of bulls**t, something they invented,” an unnamed investor told the Brazilian publication.
While no information about the hack was provided, the company allegedly laid off most of its employees.
Growing crypto concerns
BlueBenx has joined the growing list of crypto companies that have failed to deliver on their promises of extravagant yield returns during crypto winter. The Brazilian crypto lender guaranteed users up to 66% returns on cryptocurrency investments through multiple in-house income streams.
The lack of trust among investors derives from the fact that various crypto platforms — which guarantee high yields — have accused similar circumstances in the past, in which they end up suspending fund withdrawals while concealing their inability to deliver on previously promised returns to customers.
Crypto investors are moving to test out lower-risk crypto yields as safer tactics due to the rising risks associated with high-yield services, as indicated above. For instance, an Australian fintech firm called Block Earner has seen an increase in investors opting for the “less risky version” of such returns.
Due to the increased interest in that market as a result of this shift in inverter sentiments, crypto startups like Block Earner are forced to develop institutional products at the same time.