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The sad and peculiar case of Satowallet’s alleged $1M cryptocurrency exit scam

Honestly, this doesn't look good ...

exit scam, bitcoin, cryptocurrency, blockchain

Nigerian cryptocurrency startup Satowallet has exit-scammed, making off with $1 million of its users’ money, reports International Business Times.

According to company CEO Samuel Ben, however, the firm isn’t responsible for those losses. Instead, he says Telegram scammers tricked users into handing over access to their funds during an extended maintenance period.

Ben also claimed the pesky scammers returned to steal more funds when Satowallet attempted to establish Know-Your-Customer policies earlier this year.

Eventually, he firmly passed the buck to its hosting provider OVH, publishing rather peculiar claims in a blog. Unfortunately for Ben, Satowallet’s Medium page has been suspended, pending investigation, presumably for suspicious behavior.

Whoops.

A cached version of the post haphazardly reads: “We also accused OVH of fraud and trying to steal our wallet servers from us. We reached out to OVH team [sic] again and got a heart breaking news and without any explanations after we accused the of stealing users funds from our server with them [sic].”

It continues: “At this point they stopped replying our messages and refused to give any further explanations. This was the point that i [sic] had to make a tweet to users that we are having issues that is beyond our control as we could do nothing as developments as it seems like we have been scammed by the server company OVH.”

Ben then claimed that lawsuits will be filed against OVH on behalf of Satowallet, and that 70 percent of his staff had resigned as a result of the situation.

It [sic] hard for me to even believe what happened, therefore i [sic] decided to seek merger while our lawyers are working to track down OVH team as they were not responding on any social media or contact,” added Ben.

Wait, why does a hosting service control user cryptocurrency?

Affected users have been quick to call bullshit on the story via Twitter, pointing out that hosting providers shouldn’t have access to the private keys of users, so the cryptocurrency should be recoverable if Satowallet was a legitimate operation.

Good question, Shrimpy.

Hard Fork has reached out to Satowallet’s hosting provider and will update this piece should we receive a reply.

Cryptocurrency exit scams are frustratingly common. You can read up on how to spot one here, and also discover some of the more ludicrous plots of the past, here.

Published September 27, 2019 — 12:58 UTC