Update : We have received an official response from IDFC Bank that the bank account of BuyBitcoin was closed on Customer request.
The future of cryptocurrency trading in India looms under dark clouds under RBI’s Banking Ban. Banks are slowly closing their ties with the crypto exchanges in India. Something like that has happened with a new exchange BuyBitcoin, also known from their website with double domain extensions: buybitcoin.org.in (org is used by non-profits).
What is BuyBitcoin.org.in?
BuyBitcoin.org.in is a new exchange opened in early 2018, based out of Delhi, or so it says on the website. BuyBitcoin also has an android app for trading. Noticeably the prices on Buybitcoin remained lower than the rest of the market, which lured a lot of traders to sign up and begin trading. They are on our list of exchanges that have not disclosed the details of their founding members.
The parent company is registered as Ansals Software Private Limited. A quick WHOIS lookup and companies registrar look up reveals an unreachable phone number, the address of registration which is different from the one on the website and names of 2 directors on the company.
The address on exchange is of Okhla Industrial estate, Delhi while on the WhoIS database and companies registrar, the company address is Pitampura, Delhi.
The directors of the company are Anas Mohammad and Subham Agarwal.
When CoinCrunch received a request to review the exchange from our contact form, it was from Animesh Khandelwal. We will get to that in a moment.
Effect of RBI’s Banking Ban
BuyBitcoin.org.in sent an email to their users, which I am too, but I never received the email. After RBI’s directive, buybitcoin claims their bank closed their account despite their efforts to ask for a grace period. Once the bank account is closed, there is no way to refund the money. The exchange also closed their wallets for all but one cryptocurrency. That is IOST. Hence a user cannot withdraw any crypto other than IOST. The reason – they have no money to maintain cryptocurrency wallets.
Currently IOST prices are highly inflated on BuyBitcoin, close to 300% more than any other exchange. The Withdrawal fees for IOST is 187 coins, roughly Rs. 1870. This is a massive loss for users. Some have invested 1000, some have invested in lakhs and everyone is losing close to 70% of their investment.
The email stated that all exchange operations will be closed on 26-Apr-2018 and if the coins are not withdrawn, the same will be lost.
Is this is an exit scam?
We independently tried to deposit money to BuyBitcoin’s account and it didn’t work. The error ‘Trouble accessing your contact’s account (ZY)’ means the account is either frozen or closed.
However, whether this account was closed by the bank or deliberately closed by the owners is yet to be known. We haven’t received an answer from either BuyBitcoin.org.in or IDFC to our detailed email questionnaire.
The bank account is from the IDFC Golf Course Branch in Gurgaon, Haryana.
What raises eyebrows though are the following actions that were or weren’t taken:
- No Bank closes account without returning the balance. Can the exchange not refund the INR to users from their personal account?
- Sure, maintenance of crypto wallets is expensive. But exchanges owe it to the user for their funds’ safety. All the funds are kept in master wallets. BuyBitcoin.org.in has to maintain just one wallet per currency. Ask the users to provide their private wallet addresses and then send the funds after deducting a small fee.
- If everyone is converting to IOST, why not do it for them at a fixed market rate? Why ask them to buy IOST at inflated rates?
- Finally, who is Animesh Khandelwal, the person who used our contact form to ask us to review ‘fastest growing exchange’ in India? It is possibly a pseudonym to show that the exchange has more employees or one real employee who we could not find.
Since none of the above measures were taken to protect the user funds, it is highly likely that this is a scam.
Prices were always low on BuyBitcoin
Everyday I got asked, “How is BuyBitcoin?” on our telegram group, as the prices of crypto were always lower on the site. Traders will go to exchanges with the lowest prices to maximise their profits. It is always safe to trade on exchanges whose team/support is accessible or publicly known. Although it is ironic that we still have no idea who created Bitcoin in the first place back in 2009.
Police Case, Legal Actions?
A message is circulating around on social media calling for an FIR on the founders based on the details from Company Registrations. We are not sure if an actual FIR has been launched. Police can easily find the identities from the bank where Buybitcoin maintained their account.
There are many unverifiable claims that the address above is incorrect as well as that the cops did not entertain the complaint. However, the only way to actually get the user money back is via the official routes of a police FIR and initiating a man hunt to detain the founders. Once the founders are found, the details can become clearer.
Advice to Newcomers in the Crypto World:
Folks, there are more scammers now than ever in this world. Everyone wants to get rich quick, and these guys try to lure you with such offers. Be very watchful. There were red flags all over Buybitcoin.org.in, please keep an eye for such indications in the future:
- No Founder details
- No Telegram or any other support channel/group
- Comments disabled on Youtube videos
- Generic address for office address.
- Lower prices than market average
Remember, do not run after quick profits. It is a gamble with very high risk. Be mindful of how much you invest and never invest more than what you can lose.
Based on the details, do you think BuyBitcoin has pulled an exit scam? Let us know in the comments below
Update: Title updated from BuyBitcoin to Buybitcoin Cryptocurrency Exchange