BITStorage

A summary of what happened?

BITStorage is an offshore cryptocurrency exchange established in 2018 and registered in Seychelles. The platform offers trading services for various digital assets, including popular cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). Despite its offerings, BITStorage has faced significant criticism and concerns regarding its operations and services.

Major Concerns and Complaints:

1. Lack of Regulatory Oversight:
   • BITStorage operates without a valid license from recognized financial authorities. Its registration in Seychelles, a jurisdiction known for lenient regulatory standards, raises concerns about the platform’s legitimacy and the safety of user funds.
2. Slow and Unreliable Withdrawals:
   • Users have reported significant delays in processing withdrawals, with some transactions taking an unusually long time or not being processed at all. Such issues suggest potential liquidity problems or operational inefficiencies within the platform.
3. Unresponsive Customer Support:
   • The platform’s customer support has been described as limited and unresponsive. Users seeking assistance with account issues or transaction problems often face difficulties in receiving timely and effective support.
4. Potential Mismanagement of Funds:
   • There are allegations that BITStorage does not adhere to Anti-Money Laundering (AML) measures, leading to concerns about the potential mismanagement or disappearance of client funds. Such practices pose significant risks to investors and undermine trust in the platform.
5. Limited Asset Selection and Trading Tools:
   • The exchange offers a relatively narrow range of trading pairs and lacks advanced trading tools, which may not meet the needs of more experienced traders seeking diverse investment opportunities.

While BITStorage presents itself as a platform for cryptocurrency trading, the numerous concerns regarding its regulatory status, withdrawal processes, customer support, and fund management practices suggest that potential users should exercise caution. Engaging with unregulated exchanges carries inherent risks, and investors are advised to consider platforms with established reputations and robust regulatory oversight to ensure the safety and security of their assets.

Analyzing the Fake Copyright Notice(s)

Our team collects and analyses fraudulent copyright takedown requests, legal complaints, and other efforts to remove critical information from the internet. Through our investigative reporting, we examine the prevalence and operation of an organized censorship industry, predominantly funded by criminal entities, oligarchs, and disreputable businesses or individuals. Our findings allow internet users to gain insight into these censorship schemes’ sources, methods, and underlying objectives.

What was BITStorage trying to hide?

BITStorage‘s attempts to hide unfavourable content through the misuse of copyright notices while allegedly engaging in perjury present serious legal concerns. These actions suggest a calculated attempt to manipulate legal systems to suppress free speech, a fundamental violation of copyright law principles and an abuse of legal processes. The use of such tactics not only undermines the integrity of copyright protection but also potentially constitutes perjury, further entangling BITStorage in legal accountability. Let’s examine the information BITStorage may be trying to remove from the internet –

Investigative Report: The Dark Side of BITStorage – A Deep Dive into Allegations and Complaints

Introduction

BITStorage, founded in 2018 and registered in Seychelles, is an offshore cryptocurrency exchange that markets itself as a platform for trading digital assets such as Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). Despite being operational for several years, BITStorage has become synonymous with complaints, allegations of malpractice, and concerns about its legitimacy. This report examines the issues surrounding BITStorage, unpacking the mounting criticisms and operational challenges that have led to its tarnished reputation.

BITStorage’s Regulatory Challenges

One of the most glaring concerns with BITStorage is its lack of regulatory oversight. Operating out of Seychelles, a jurisdiction with minimal regulatory requirements for financial entities, BITStorage avoids adhering to the stringent rules imposed by major regulatory bodies. This lack of accountability leaves users vulnerable, as there are no governing authorities to hold the exchange accountable for malpractice or operational failures.

The absence of a proper license and lack of transparency about regulatory compliance has raised red flags among industry experts and users alike. Without adherence to Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols, the platform has been accused of facilitating unchecked transactions, potentially harboring illegal financial activities.

Key Allegations and Complaints

1. Withdrawal Issues
   • A significant number of users have reported delays in withdrawing funds, with some transactions taking weeks or even months to process. In more severe cases, users allege that their withdrawal requests were ignored entirely, resulting in substantial financial losses.
   • These delays have led to speculation about BITStorage’s liquidity and whether the platform has sufficient reserves to honor user withdrawals, a fundamental requirement for any exchange.
2. Unresponsive Customer Service
   • Many users attempting to resolve account issues or track their funds have encountered a wall of silence from BITStorage’s customer support team. Complaints describe limited communication channels, such as unanswered emails and an absence of real-time assistance.
   • For a platform handling significant amounts of cryptocurrency, this lack of customer service undermines trust and raises questions about its commitment to resolving disputes transparently.
3. Potential Mismanagement of User Funds
   • BITStorage has faced allegations of mismanaging user funds, with users claiming that their deposits were either frozen or inaccessible without clear justification. This has sparked fears that the platform might be redirecting funds for unauthorized purposes or experiencing financial instability.
4. Security Concerns
   • Despite claiming to have robust security measures in place, BITStorage has yet to undergo third-party security audits. Users have raised concerns about the safety of their funds and personal information, especially given the platform’s offshore registration and lack of adherence to industry standards.
5. Opaque Operations
   • The platform’s lack of transparency about its leadership, operational headquarters, and team members has fueled suspicions. Unlike reputable exchanges, BITStorage does not publicly disclose its executives or governance structure, making it difficult to hold anyone accountable for missteps.

Operational Weaknesses

1. Limited Asset Variety and Tools
   • BITStorage offers a narrow range of trading pairs and lacks advanced trading features, limiting its appeal to experienced traders. Critics have pointed out that the platform seems outdated compared to its competitors, which offer more comprehensive tools for portfolio management and analysis.
2. Questionable Fee Structures
   • Users have reported discrepancies in transaction fees, with hidden charges often appearing during trades. This lack of clarity has left users feeling deceived, further eroding confidence in the platform.
3. Reputation Damage
   • Negative reviews and public complaints about BITStorage have proliferated on forums and social media platforms. Common themes include accusations of fraud, financial losses, and dissatisfaction with the platform’s lack of accountability.

Impact on Users and the Cryptocurrency Ecosystem

The controversies surrounding BITStorage have broader implications for the cryptocurrency industry, particularly for offshore exchanges operating without regulatory oversight. Users who entrusted their funds to BITStorage have not only faced financial losses but have also contributed to the growing distrust of unregulated exchanges.

The platform’s alleged practices—ranging from withdrawal delays to mismanagement of funds—highlight the risks of engaging with unregulated entities. Such behaviors cast a shadow over the broader cryptocurrency ecosystem, where trust is a critical component of market participation.

Recommendations for Potential Users

Given the numerous complaints and allegations against BITStorage, potential users should approach the platform with caution. Here are some critical recommendations:

• Research Alternatives: Consider established exchanges with a strong regulatory track record, transparent leadership, and robust customer support systems.
• Verify Regulatory Compliance: Always confirm whether an exchange is licensed and adheres to AML and KYC protocols.
• Test with Small Investments: If engaging with a less-known platform, start with small transactions to assess reliability before committing significant funds.
• Monitor Reviews: Regularly check forums and trusted review platforms for user feedback.

Conclusion

BITStorage’s operations are plagued by allegations of delayed withdrawals, unresponsive customer service, opaque practices, and potential fund mismanagement. While it markets itself as a convenient platform for cryptocurrency trading, its offshore status, lack of regulatory oversight, and widespread complaints suggest otherwise.

For the cryptocurrency industry to thrive, trust and accountability are non-negotiable. BITStorage serves as a cautionary tale for both users and regulators, illustrating the importance of due diligence and the risks associated with unregulated exchanges. Until significant reforms or transparency measures are implemented, BITStorage remains a questionable choice for cryptocurrency investors.

How do we counteract this malpractice?

Once we ascertain the involvement of BITStorage (or actors working on behalf of BITStorage), we will inform BITStorage of our findings via Electronic Mail.

Our preliminary assessment suggests that BITStorage may have engaged a third-party reputation management agency or expert, which, either independently or under direct authorization from BITStorage, initiated efforts to remove adverse online content, including potentially fraudulent DMCA takedown requests. We will extend an opportunity to BITStorage to provide details regarding their communications with the agency or expert, as well as the identification of the individual(s) responsible for executing these false DMCA notices.

Failure to respond in a timely manner will necessitate a reassessment of our initial assumptions. In such an event, we will be compelled to take appropriate legal action to rectify the unlawful conduct and take the following steps –

Since BITStorage made such efforts to hide something online, it seems fit to ensure that this article and sensitive information targeted online by these events get a lot more exposure and traffic than what it would have received originally

We hope this becomes an excellent case study for the Streisand effect…The key idea behind the Streisand effect is that efforts to restrict information can backfire, often causing the information to gain more attention than it would have otherwise. This effect is widespread in the digital age, where users quickly notice and spread censorship efforts on social media and other platforms. Trying to suppress something can unintentionally lead to it becoming more visible, which BITStorage is finding out the hard way.

Potential Consequences for BITStorage

Under Florida Statute 831.01, the crime of Forgery is committed when a person falsifies, alters, counterfeits, or forges a document that carries “legal efficacy” with the intent to injure or defraud another person or entity.

Forging a document is considered a white-collar crime. It involves altering, changing, or modifying a document to deceive another person. It can also include passing along copies of documents that are known to be false. In many states in the US, falsifying a document is a crime punishable as a felony.

Additionally, under most laws, “fraud on the court” is where “a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier of fact or unfairly hampering the presentation of the opposing party’s claim or defense.”  Cox v. Burke, 706 So. 2d 43, 46 (Fla. 5th DCA 1998) (quoting Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989)).

Is BITStorage Committing a Cyber Crime?

Yes, it seems so. BITStorage used multiple approaches to remove unwanted material from review sites and Google’s search results. Thanks to protections allowing freedom of speech in the United States, there are very few legal ways to do this. BITStorage could not eliminate negative reviews or search results that linked to them without a valid claim of defamation, copyright infringement, or some other clear breach of the law.

Faced with these limitations, some companies like BITStorage have gone to extreme lengths to fraudulently claim copyright ownership over a negative review in the hopes of taking it down.

Fake DMCA notices have targeted articles highlighting the criminal activity of prominent people to hide their illegal behavior. These people, which include US, Russian, and Khazakstani politicians as well as members from elite circles including the mafia and those with massive financial power, are all connected – and alleged corruption ranging from child abuse to sexual harassment is exposed when exploring evidence found at these URLs. It appears there’s a disturbing level of influence being exerted here that needs further investigation before justice can be served. BITStorage is certainly keeping interesting company here….

The DMCA takedown process requires that copyright owners submit a takedown notice to an ISP identifying the allegedly infringing content and declaring, under penalty of perjury, that they have a good faith belief that the content is infringing. The ISP must then promptly remove or disable access to the content. The alleged infringer can then submit a counter-notice, and if the copyright owner does not take legal action within 10 to 14 days, the ISP can restore the content.

Since these platforms are predominantly based in the U.S., the complaints are typically made under the Digital Millennium Copyright Act (DMCA), which requires online service providers and platforms to react immediately to reports or violations. Big Tech companies rarely have systems in place to assess the merit of each report. Instead, all bad actors need to do is clone a story, backdate it, and then demand the real thing be taken down.

Reputation Agency's Modus Operandi

The fake DMCA notices we found always use the “back-dated article” technique. With this technique, the wrongful notice sender (or copier) creates a copy of a “true original” article and back-dates it, creating a “fake original” article (a copy of the true original) that, at first glance, appears to have been published before the true original.

Then, based on the claim that this backdated article is the “original,” the scammers send a DMCA to the relevant online service providers (e.g. Google), alleging that the ‘true’ original is the copied or “infringing” article and that the copied article is the “original,” requesting the takedown of the ‘true’ original article. After sending the DMCA request, the person who sent the wrong notice takes down the fake original URL, likely to make sure that the article doesn’t stay online in any way. If the takedown notice is successful, the disappearance from the internet of information is most likely to be legitimate speech.

As an integral part of this scheme, the ‘reputation management’ company hired by BITStorage creates a website that purports to be a ‘news’ site. This site is designed to look legitimate at a glance, but any degree of scrutiny reveals it as the charade it is.

The company copies the ‘negative’ content and posts it “on the fake ‘news’ site, attributing it to a separate author,” then gives it “a false publication date on the ‘news’ website that predated the original publication.

The reputation company then sent Google a Digital Millennium Copyright Act notice claiming the original website infringed copyright. After a cursory examination of the fake news site, Google frequently accepts the notice and delists the content.

In committing numerous offences, BITStorage either premeditated actions or were unaware of the consequences. Despite hiring an agency to make Google disregard any negative information about BITStorage, ignorance does not excuse this wrongdoing.

Fake DMCA notices have targeted articles highlighting the criminal activity of prominent people to hide their illegal behavior. These people, which include US, Russian, and Khazakstani politicians as well as members from elite circles including the mafia and those with massive financial power, are all connected – and alleged corruption ranging from child abuse to sexual harassment is exposed when exploring evidence found at these URLs. It appears there’s a disturbing level of influence being exerted here that needs further investigation before justice can be served. FSMSmart is certainly keeping interesting company here.

The Reputation Laundering

Rogue Reputation agencies use spurious copyright claims and fake legal notices to remove and obscure articles linking clients to allegations of tax avoidance, corruption, and drug trafficking. Most of these reputation agencies are based offshore, mainly in Russia, India, and Eastern Europe, and they do not worry about complying with US-based laws.

The content in all of the articles for which the fraudulent DMCA notices have been sent relates to allegations of criminal allegations, including corruption, child abuse, sexual harassment, human trafficking and financial fraud against businesses and individuals with ultra-high net worth.

In addition to the misuse of the DMCA takedown process, there is a notable absence of enforcement concerning perjury violations. The statutory requirement related to perjury is designed to deter copyright holders from submitting fraudulent or knowingly false takedown requests, as they may face legal consequences for making false declarations under penalty of perjury. However, to date, there have been no known instances of any individual being prosecuted for perjury in connection with the submission of false DMCA takedown notices.

This lack of enforcement has emboldened copyright holders to exploit the DMCA takedown process to suppress dissent, criticism, or other unfavorable content, without fear of legal repercussions.

Some of the people and businesses who have employed this tactic to remove legitimate content from Google illegally include a Spanish businessman-turned-cocaine-trafficker, Organised crime, an Israeli-Argentine banker accused of laundering money for Hugo Chávez’s regime, a French “responsible” mining company accused of tax evasion, child molesters and sexual predators. BITStorage is in great company ….

What else is BITStorage hiding?

We encourage you to ‘Dork‘ Google by searching for keyword combinations such as [BITStorage] + {Negative Keyword, such as Scam, Fraud, Complaints, Lawsuit, Sanction, etc} on Google. It’s likely if you scroll down to the bottom of this Google search results, you’ll stumble upon this Legal Takedown notice (pictured below)

To make such an investigation possible, we encourage more online service providers to come forward and share copies of content removal requests with industry experts and researchers. If you have any information on BITStorage that you want to share with experts and journalists, kindly email the author directly at [email protected].

All communications are strictly confidential and safeguarded under a comprehensive Whistleblower Policy, ensuring full protection and anonymity for individuals who provide information.