A newly minted exchange called BiteBTC has been found to be charging alt-coins large listing fees, claiming to have hundreds of customers, and long KYC waiting periods. And strangely ‘pumped’ Bitcoin pricing meant to lure in customers who believe (once their KYC submission is approved) they can sell their $BTC for a significant premium than other exchanges. Clever.
But the internet is filled with eyes who’ve seen this sort of ‘exit scam’ before and have sniffed it out. The first concern can be seen in the video below as it clearly describes the unusual $BTC spread versus all other exchanges at the time:
That’s a 10% spread versus other exchanges. Of course, when this video was posted to Twitter by a user with a sharp eye for scams, the BiteBTC pricing was adjusted to accurately reflect the overall market.
Still, you can imagine the influx of customers rushing to get a 10% premium on their trades as quickly as possible. As Bitcoin has slid, sellers have been searching for the best possible executions.
But that isn’t necessarily the beginning of this particular scam. BiteBTC has been charging small cap coins enormous sums to list on their exchange. Collecting the fees while claiming that they have thousands of users ready to trade their coins and ‘pump’ when needed.
This would be attractive when small-cap alt-coins are having a difficult time getting listed on other exchanges. Volume usually equals a drift up in overall value, so the offer, no matter how pricey, can seem attractive. And many token firms have fallen for it.
But our source on this story does not believe that the team behind this dubious firm will be satisfied with running off as just ‘thousand-aires’. No, there seems to be a larger end game here…
The big bucks can be had by registering customers, claiming long wait lists and KYC due diligence and then opening the floodgates and approving them en masse. The capital will come rushing in setting up the perfect exit scam. Millions of dollars chasing inflated prices and promised quick executions will make for a feeding frenzy.
The type of scam that has been executed within the ICO ecosystem several times in the past two years. The fact that this group is using an exchange to set it up is new.
BiteBTC was called out on Twitter regarding the pricing of their listed coins as well as whether or not they had actual customers trading on their platform. The allegations were simple, ‘what you are claiming to be you are not.’ The volume isn’t real and the customer claims aren’t real.
In every way, these are damning allegations that no firm should allow to go unanswered. BiteBTC provided little to no response to these claims other than to quickly adjust $BTC pricing on their exchange and to say “that’s absurd, have a nice day.” Anyone connected to this firm should be very, very concerned.
BiteBTC could have provided screenshots of customer counts, actual trades, KYC forms and submissions of scale (that they claimed), among other corresponding responses. They’ve done nothing of the sort.
So what remains in the public domain is that they’ve manipulated the pricing of $BTC, are charging small-cap coins significant fees for listing, and are funneling long lines based on those first two items with false claims meant to lure in unsuspecting customers.
Let’s see if they do, in fact, plan to gather customer funds and effect an exit scam.
**An addendum to this article that we didn’t have yesterday. This could all be somewhat legit at the moment. Although it doesn’t smell like it at the moment and BiteBTC certainly didn’t provide any answers that would exonerate them or confirm their claims of ‘hundreds of thousands of customers’ and thousands of traders. Yet, they could see the error of their ways and not exit scam. They could actually be running a legit operation. It just doesn’t sound, smell, or feel like it at the moment.