Fake Trading Platform Coinbit at Center of Lawsuit Claiming it Stole Millions from 200+ Crypto Investors

News | April 10, 2024 By:

On Friday, March 15, 2024, Stephen Shaya, a family practice physician in Michigan, filed a class action lawsuit alleging a complex cryptocurrency scheme that stole millions from investors.

The suit was filed in the U.S. District Court for the Eastern District of Michigan against several individuals involved in what’s known as a “pig butchering” scam. Shaya claims the defendants used a fake cryptocurrency trading platform called Coinbit to lure unsuspecting individuals into transferring large sums of money, which was then allegedly converted and laundered through a network of digital currency addresses and exchanges.

According to the complaint, Shaya was first approached last July on Facebook by a person claiming to be named Kylie Nofs. Over the following months, Nofs convinced Shaya to invest in cryptocurrency trades that would be executed through Coinbit. Shaya was provided with encouraging fabricated reports of strong returns until he had transferred close to $400,000 to various overseas bank accounts associated with the defendants.

When Shaya asked to withdraw his funds, the Coinbit platform blocked his access and accused his account of money laundering issues. An investigation by the digital forensics firm Inca uncovered that neither Coinbit nor Kylie Nofs were legitimate. Inca’s blockchain tracing found that Shaya’s Bitcoin and Ethereum deposits were laundered through a series of wallet addresses before large sums of the digital currencies ended up at major exchanges like Binance and others.

The lawsuit alleges the scheme involved over 200 victims who lost approximately $16 million worth of cryptocurrency. Inca’s analysis identified multiple Bitcoin and Ethereum wallets that received commingled funds from Shaya and other class members. The complaint is seeking an emergency court order to freeze wallet addresses Inca linked to the alleged scam.

Please contact BlockTribune for access to a copy of this filing.