Digital currency investor goes after Bitstamp, GateHub over lost millions

A Canadian digital currency enthusiast is on the offensive as he directs legal efforts against two exchanges operating in the space. Digital currency trader Salim Satir alleges that both the Bitstamp and the GateHub exchanges ow him millions of dollars, asserting that, either through misrepresentation or poor platform management, he is out almost $5 million, and he wants the exchanges to make up for his losses. His case was filed with the High Court of Justice in England and Wales.

Satir believes that GateHub completely misled potential customers in its BTC to Ripple (XRP) trading possibility. The way the trading would take place, according to the GateHub website, would be for direct trading between the two; however, what Satir found, only after having sent his transactions, was that Gatehub was, in actuality, issuing “Bitcoin IOUs” for the investments. Those IOUs are held by Bitstamp.

In a statement to CoinGeek, GateHub said it did not make the representations described by Satir, who never purchased or held any GateHub BTC on its platform.

That XRP to BTC purchase caused him to lose around $2.5 million, according to Satir. He claimed GateHub was also negligent for “technical errors” associated with its trading platform. He explained that he attempted to transfer 872 BTC in December 2017 and January 2018; however, the transactions were blocked for reasons that haven’t been specified.

GateHub said it did not suffer the technical fault alleged and that Satir always had
access to his wallet via GateHub, but even if he hadn’t have access, he could have
accessed it through other user interfaces or directly on the XRP Ledger.

As a result of the inability to conduct the transfers and the subsequent price drop of BTC, Satir alleged that each of the BTC lost $2,992. That made his total loss reach the $2.5 million figure in the suit, and Satir asserted that GateHub willingly kept a known technical fault from being shared with the public—a claim that GateHub denied to CoinGeek.

There’s also the matter of some missing BCH tokens. Satir reportedly should have received 872 BCH when the August 2017 hard fork occurred, based on the fact that he held 872 BTC on the platform, but never received the funds. He accused GateHub of keeping the money “for its own benefit.”

GateHub says it only provided a user interface which allowed Satir to access other platforms and trade with others. He never traded with GateHub, according to the platform. As Satir did not hold any GateHub-issued Bitcoin at the time of the fork, GateHub said it had no responsibility for ensuring that he received Bitcoin cash and never retained Satir’s BCH tokens for its own benefit.

This isn’t the first time Gatehub has come under fire. Last November, hackers gained access to the personal information of 1,400,000 digital currency wallets and, only a few months before that, the platform was hacked, leading to a loss of around $10 million in XRP.

Editor’s note: This article has been updated with the statement from GateHub.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.