Here is an unfortunate tale of Bytecoin, Binance, and Poloniex.
As a cryptocurrency designed for untraceable payment, Bytecoin was recently listed on Binance. And when a new coin is listed, you see a slight price movement.
The movement was significant.
On Binance, Bytecoin moved from a cent to close to 90 cents in less than an hour. That’s your 90x right there.
On Poloniex, Bytecoin was slowly climbing up to a couple of cents.
It Was An Oppurtunity Of A Lifetime For Traders
Because the price gap was a signal to make quick profits.
Many thought it was easy. All you have to do is buy Bytecoins from Poloniex at a lower price, and then transfer — sell — it on Binance.
Plus, as Bytecoin transactions are quick, the buy-sell process shouldn’t take more than 20 minutes, right?
Imagine in just 20 minutes, you are literally converting $1000 to $100,000 (if sold high).
Such arbitrage oppurtunites can make you a fortune.
But Then Something Happened…
The numbers just didn’t add up.
Based on the volume on Binance, Bytecoin marketcap should have been $27 billion and more. It should be placed above Ripple taking #3 spot in Coinmarketcap.
On Poloniex, there was no major price movement.
Clearly, something was wrong.
Many claimed it was the limited liquity on Binance. Others thought it was the greatest bull-run in the crypto industry ever. And a reason why they will all “make it.”
And few knew it was fishy.
Perhaps the greatest pump and dump scheme ever.
And they were right because:
Poloniex Suspends Deposit & Withdrawal
No one could deposit or withdraw Bytecoin from Poloniex. Which means traders cannot transfer their Bytecoin to Binance.
Those who purchased on Poloniex were stuck, and those who bought on Binance couldn’t sell it on Poloniex for a lower price.
This is when the community was cautious. It was a hint of what was about to happen:
But it was too late.
Bytecoin went back to a couple of hundred satoshis on Binance. And on Poloniex, it dropped even further.
It Doesn’t End Here! There Is A Bigger Conspiracy!
Millions of dollars were lost.
And thousands of hearts were broken.
Money? Tens and hundreds of millions?
It made the community furious. Many blamed Poloniex for this. In fact, they believe it was a trap. A trap executed by Poloniex.
As Poloniex locked the wallet, they can buy Bytecoins from its own users for a cheaper price – and then sell it on Binance. It just shows how unregulated the market is.
On the other hand, Binance suspended deposits at the same time.
It means you can only buy but cannot sell.
Cases Are Filed & Accounts Are Shut
There are so many tweets out there – so many unfortunate stories – of people losing a large chunk of their money.
They are shutting their accounts down:
And seeking legal action against these exchanges:
Everything is still a mystery.
Hundreds of millions have disappeared.
Who is to blame?
Is it the traders, or the exchanges? Did Poloniex, given its past, actually lock the wallet up to buy Bytecoins from its users to make profits?
Or was it Bytecoin devs who have pre-mined 82% of the coins?
It is an unfortunate tale.
As of today, Bytecoin moved from #15 rank to #1594 on CoinMarketCap as the exact marketcap and volume is unassigned.