It advertised itself as “the safest platform to exchange cryptocurrencies and build a digital portfolio”. In a market rife with scams, carpet pulls, and spectacular collapses, it was this bold statement from Biconomy that lured investors hoping to repeat the success stories of the crypto-rich and quickly become millionaires and billionaires.
But now some investors who have used the platform are reporting troubling experiences with the exchange online. Their complaints come amid a wave of crashes in the crypto space that have damaged investor confidence and destroyed the savings of many.
Biconomy, a Canada-based cryptocurrency exchange, has grown in popularity with impressive numbers in just over three years since its inception on October 11, 2017: more than $12 billion traded quarterly, over 350,000 registered users and availability in more than 100 countries . But now a spate of complaints and negative reviews from multiple users paints a troubling picture that has become all too familiar in the crypto space, as bears stomp around everywhere and watchdogs worldwide engage in endless debates over crypto policy but little else about regulation.
On July 12, Biconomy launched the $BONE Listing Celebration to commemorate the listing of Shiba Inu governance token BONE on its exchange. After the listing, Biconomy traded 77.76% of the total BONE volume and became the top exchange for BONE daily trading volume in the world. In just 24 hours, the BONE platform traded around $6,103,440, or about $6.1 million.
Twitter user @Maximous Darwin was among those who took notice and bought the governance token on the platform. He is a member of the Shiba Army, the staunch followers known for their vocal support on social media for the dog-themed meme token and their never-ending optimism that one day its price will soar and make them all rich. Maximous Darwin’s real name is Ricardo; his surname will not be published at his request. Ricardo, who comes from Portugal, told International business hours that his passion and belief in Shiba Inu and his ecosystem had prompted him to buy more BONE. And he chose Biconomy because of its recent listing and the “good volume” the platform was garnering for BONE.
MaximousDarwin created an account on the platform on July 12th and thereafter transferred all his BONE tokens from his Metamask wallet and from his MEXC account.
“Everything went well for a few days,” he told IBT. “The platform seemed reputable; it had good volume and I was able to make some good trades, I even ‘won’ around 300 BONE on one trade.”
On July 20th he faced his first problem. Biconomy, he said, “had problems with BONE,” and trading wasn’t possible at the time. He said there was no notice or indication on the site that withdrawals were frozen.
At first, MaximousDarwin thought it was a temporary glitch, something all too common on cryptocurrency exchanges. But he said he researched a little more about the platform and saw some worrying signs. After some online research, he suspects other customers may have had the same issues and “rushed” to withdraw their funds from Biconomy.
That’s when things got out of hand. “I couldn’t withdraw because I kept getting an error message saying the amount was too high,” he said. “So I tried it with smaller and smaller amounts. And I submitted everything successfully, divided into 10 requests of 700 BONE each.”
The platform accepted seven of his 10 withdrawal requests, but the multiple requests meant he had to pay higher costs overall to withdraw his BONE. He only received 680.5 BONE for each of his withdrawal requests since the cost of each transaction on the platform was 19.5 BONE. Maximous claimed that Biconomy “enforced a lower amount” for withdrawals because it charges a higher fee for smaller amounts. And the money was returned late.
Three of his withdrawal requests were cancelled. Concerned about his money, he said he tried withdrawal requests for different amounts and even sold part of his BONE for USDT to test if Biconomy would allow USDT withdrawals, all to no avail.
“I’ve contacted them in all sorts of ways, I’ve created a lot of support tickets and haven’t had a response to any of them,” he said. Maximous said he tried to reach the platform’s Telegram account but was “requested to wait” for no reason.
Meanwhile, Maximous was panicking. He turned to the Shiba Inu community for help and shared his experience on Friday night on the official Shiba Inu Discord and on Twitter. GossipShib, a former Shiba Inu growth member and influencer, tagged Biconomy’s Twitter account over Maximous’ complaint.
“As soon as the Twitter posts started attracting attention, the official Biconomy Twitter account contacted me directly,” he said. IBT viewed screenshots of this conversation, which was conducted via Twitter Direct Messaging. Biconomy promised to solve the problem by Saturday, but the “withdrawal requests have been canceled or failed for some reason. So I resubmitted it,” Maximous said.
Then he found out that the funds he was getting for each request were less than what he should have been getting. He said the platform deducted 185 BONE and 54.97 USDT.
Biconomy’s explanation was interesting – and made no sense to Maximous.
“Your issue has been resolved and you may withdraw the body of the original deposit,” Biconomy told him via Twitter? “The technical service reported that your account was illegally arbitrated against the trading rules on our exchange, so the withdrawal was frozen. You probably know where you are wrong. Now you can freely withdraw the body of the deposit.”
Biconomy also asked Maximous to “delete all negative comments, as well as the comments made by other people as a result of your negativity.” It added: “You are wrong in this situation and have broken the rules of the exchange.”
Biconomy also warned: “After the withdrawal, your account will be frozen and you will no longer be able to use it because you grossly violated our rules.” Maximous was able to access his Biconomy account at the time of writing this article.
That was not all. Biconomy told him, “You are allowed to withdraw the entire amount of the deposit. All profits were made illegally due to arbitrage and you know it.”
Maximous posted screenshots of part of this conversation with Biconomy on his Twitter timeline.
Investopedia defines arbitrage as “the simultaneous buying and selling of the same asset in different markets in order to take advantage of tiny differences in the asset’s quoted price. It takes advantage of short-lived fluctuations in the price of identical or similar financial instruments in different markets or in different forms.”
Maximous said he doesn’t do arbitrage and just wants to withdraw his money, which he can’t because the platform doesn’t allow it.
After using Biconomy, Maximous was left with just 5,684.24 of the 6,5111.01 BONE he owned – 462.77 BONE fewer, or a loss of around $223.74. That might seem like little in the crypto space, but if all registered users in Biconomy lost that much, for example, it would total more than $78 million. Considering that many crypto investors are millennials who are pumping their savings into the market in hopes of getting rich quick, the impact of such practices by crypto players is more damaging than apparent and will continue to have an impact on people’s lives Financial budgets will impact long time to come.
More such victims are popping up online
The recent crypto crash has weakened the fundamentals of several crypto companies, most of which operate in a regulatory vacuum. In June, major US cryptocurrency lending firm Celsius Network froze withdrawals and then filed for bankruptcy earlier this month. Crypto hedge fund Three Arrows Capital filed for liquidation late last month. Popular stablecoin project TerraUST imploded in May.
The major crypto meltdown and the many scams that have come to light have left many investors dry.
IBT’s online search for other possible Biconomy victims yielded more Twitter users who accused the platform of defrauding its investors. A Twitter user using the @ handlee_f_i_o_p had a similar experience to Maximous.
“They cancel all orders,” he told IBT. Only 90% of the deposit is (may) be withdrawn. The remaining 10% they stole for themselves. And that’s at best. In the worst case, they don’t spend anything. Support ignores requests. Blocked in Telegram chat.”
“The day I couldn’t resign, refusals came, even though I passed the document review. After a long appeal for support via telegram, I began to partially withdraw,” said the investor.
He said he tried to write to the crypto exchange many times but they didn’t reply.
He claimed: “It is impossible to make money on this exchange. They cancel all profitable trades,” adding, “I think I was very lucky that I was able to withdraw almost all my money from there.”
Another Twitter user who goes by the name @Kozen shared a similar experience. Like Maximous, he was looking for a platform that would sell BONE and have high trading volume. He too was unable to withdraw his funds and after Biconomy posted his issue on the official Shiba Inu Discord, he contacted him and – as in the other two cases above – was told he was “only in will be able to withdraw ” his “first deposit” but not the profit he made on the platform.
He says he was blocked after repeated follow-ups and posts on Biconomy’s Twitter and Telegram accounts. Kozen thinks there could be many others who have had similar experiences.
Biconomy has yet to respond to IBT’s email asking for comment on these allegations by its users. This article will be updated when we get a response from the cryptocurrency exchange.
Before all of this happened, the Ontario Securities Commission (OSC) issued an alert on March 29 naming several cryptocurrency exchanges that had not registered with the regulator. Biconomy was one of them.
“We issue investor warnings and alerts about possible harmful or illegal activities and maintain an alert list of companies or individuals engaging in activities that may pose a risk to investors,” OSC said in the advisory.
In response to an email from IBT, OSC referred to an amended recommendation it issued June 1, which identified companies on the March 29 list that had been granted “exempt exemptions.” Biconomy is not on the modified advisory, meaning the OSC warning remains.
https://www.ibtimes.com.au/investors-go-online-complain-about-crypto-exchange-biconomy-holding-back-their-funds-1834778?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution Investors are turning online to complain about crypto exchange Biconomy holding back their funds