Bitmarket Gone Without Warning

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The entire case is shrouded in mystery; however it seems that the exchange was operating with partial reserves for a long period of time, either the result of hacking or poorly managed finances. This was finally uncovered when the operators attempted to sell the exchange, and reported as fraud, which may have resulted in the forced closure. One hope was that requesting additional KYC/AML would reduce the withdrawal requests to a manageable level, however that failed to work. The end result left Niemiro in an impossible position, by which he chose to end his life. The use of proper multi-signature cold storage wallets can prevent theft, both internal and external, by enforcing that all parties agree to every expense or withdrawal. Any hot wallets should be insured. Regular auditing of the exchange enforces that these rules are followed and that any temporary shortage can be corrected.

This exchange or platform is based in Poland, or the incident targeted people primarily in Poland.

About Bitmarket.Pl

“In an unexpected move that surprised most of its users,” “Polish cryptocurrency exchange BitMarket announced its shutdown.” “With an average daily trading volume of around $850,000, BitMarket was the second-largest cryptocurrency exchange in Poland.” “Dear Users, We regret to inform you that due to the loss of liquidity, since 08/07/2019, Bitmarket.pl/net was forced to cease its operations.” “A translation of the report from IQ Partners showed that … BitMarket was unable to settle liabilities by its operator, Kvadratco Services Limited. Gyptrade, which was set to takeover BitMarket, said it won’t be able to complete the process. The company also reportedly filed a complaint with the district prosecutors in the Polish town of Olsztyn, accusing BitMarket of committing fraud.” “A Reddit post suggested that the exchange had been exhibiting odd behavior in the weeks prior to the closure. A Redditor with the username OdoBanks wrote that “red flags” included users being forced to change their passwords without explanation and withdrawals halted over unusual additional know-your-customer procedures.” “Currently, it is not known how BitMarket users will be able to withdraw their funds” “More than 400 investors allegedly lost a total of 2300 bitcoin (worth approximately $23 million,)” “Police are investigating the death of Tobiasz Niemiro, a Polish entrepreneur and co-owner” “Niemiro’s body was found with a bullet wound to the head on Thursday in a forest near his home city of Olsztyn” “Poland’s leading newspaper, Gazeta Wyborcza, which has been heavily following the story, suggested that Niemiro, 44, had committed suicide.” “In separate statements issued after the close of Bitmarket, Niemiro and his co-founder, Marcin Aszkiełowicz, denied allegations that they had misappropriated clients’ funds.” “Niemiro also told Polish website Money.pl, that he was not responsible for administering the exchange funds and had suffered losses himself.” “I lost everything because somebody caused the collapse of the exchange,” he said. “Now I'm losing face and my good name, for which I've worked all my life. I am one of the victims.”

This exchange or platform is based in Poland, or the incident targeted people primarily in Poland.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Bitmarket Gone Without Warning

Date	Event	Description
July 1st, 2019 12:01:27 AM MDT	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $23,000,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Coming soon.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.