Following the $32M hack, BlueBenx stops withdrawals and fires staff

Following the $32M hack, BlueBenx stops withdrawals and fires staff

Brazilian crypto lending platform BlueBenx has reportedly frozen withdrawals for all of its 22,000 users following an alleged hack that cost the company almost $32 million or approx 160 million Brazilian Real. 

While no details were provided about the nature of the hack, BlueBenx has laid off most of its workforce. In an email sent to its customers last Friday explaining the situation, the company wrote:

Last week we suffered an extremely aggressive hack in our liquidity pools on the cryptocurrency network, after incessant attempts at resolution, today we started our security protocol with the immediate suspension of operations of BlueBenx Finance products, including withdrawals, redemptions, deposits, and transfers.

The communication stated that these measures would remain active for at least 180 days. As per reports from the local news channel Portal do Bitcoin, more than 30 employees were fired. 

With this, BlueBenx joins a host of other companies that have halted withdrawals and fired staff amid the crypto winter. It doesn’t come as a surprise since the Brazilian crypto lender offered exorbitant yields on several in-house products of up to 66%, following the trail of other affected companies. 

Some of these products didn’t even reveal the company’s investment strategy to offer such generous returns, according to customer reports. 

This has led to suspicions among some investors that the alleged hack that promoted mass layoffs and withdrawal suspension might be a hoax to cover the company’s real situation. Lack of clarity on the hack has also added weight to the theory. 

“I think there’s a high probability of it being a scam because this whole hacker attack story seems like a lot of bullshit, something they invented,” were the loosely translated words of an unnamed investor to Portal do Bitcoin.

BlueBenx was also investigated back in January by the Brazilian Securities and Values Commission for allegedly selling unregistered securities as part of its portfolio. 

As a result of the changed customer sentiment, the Brazilian government is in discussions to float a bill that would severely penalize companies engaging in dishonest behavior. 

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James Satoshi
James Satoshi
James is a leader in Web3, NFTs, & DeFi. You'll spot him covering all topics through-out Coinmash - some say he's so good he doesn't even seem real.