Local media reported that police authorities of China have opened an investigation case after the funds and investments of users were transferred into three different crypto addresses and right after, these addresses have been frozen.
An exit scam is when there are no services provided in return for the paid money. Some say that Bitisis was a pyramid scam and a crypto exchange merged in one.
Local press also mentioned that Bitisis was a successful Ponzi scheme, tempting investors to convert their BTC funds into that platform’s own IRRT (Islamic Republic Rial Token) token. Deposits attracting a so-called “high premium” investors were then able to convert their IRRT to USDT (Tether), through several withdrawal ways and thresholds.
Bitisis seduced investors with promises of plenty of opportunities dependent on referral commissions and using aggressive sales and marketing tactics to win over unsuspecting investors and targeting the users of main Chinese social media platforms including Baidu, Zhihu, and Tieba by including online tactics across Chinese social media designed to falsify SERPs and the available information about the company.
Users reported that after a while they received an email declaring that Bitisis exchange had suspended its business and is currently on hold, prompting them to report and engage law enforcement. Investors alerted a major digital currency exchange staff of the way Bitisis was acting. This lead to the relevant three addresses being frozen before funds could be taken from the scam.
Connections to China were first realized when investors noticed the use of an Alibaba cloud server when analyzing the exchange. Also, with the exclusive amount of advertisement and promotions for the exchange in Chinese social media online, some believe that the scam is highly expected to be controlled from China.
Other links to similar exchanges
The exchange is also linked to several other known scams, using similar marketing methods and scheme structures to defraud investors. As reports mention, the scammers themselves failed to deliver the technical measures to collect the funds, with their technical naivety responsible for their digital currency accounts being frozen before the scammers could make off with the funds.
Bitisis operator is believed to be a member of a ring that operates many other exchanges based in various regions outside of China. According to the reports, the scammer has a connection to other fraudulent platforms in other countries. For instance, the hacker has links to the Venezuela-based ‘Bit-Ven’ scheme which has distributed marketing materials that are near-identical to those published by Bitisis.
Ponzi scheme: is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
Baidu: is a Chinese multinational technology company specializing in Internet-related services and products and artificial intelligence (AI), headquartered in Beijing’s Haidian District. It is one of the largest AI and internet companies in the world.
Zhihu: is a Chinese question-and-answer website where questions are created, answered, edited, and organized by the community of its users. Its website, zhihu.com, was launched on January 26, 2011.
Tieba: is the most used Chinese communication platform hosted by Chinese search engine company Baidu, and was established on December 3, 2003.