Croatian cryptocurrency trading company BitLucky has managed to scam its investors out of 15 million euros. This is the biggest crypto scam in Croatia so far, and the founders of the company are on the run. After the Montenegrin adventure of the king of crypto currencies – Do Kwon – who was arrested on the airport in Podgorica, it seems like the Balkan is becoming a hot zone for crypto scams.
It was promised that this particular Croatian project will net monthly investment returns of 5% to 25% for its clients.
“We will try to rectify part of the damage and improve upon the current situation,” says Marko Primorac, Minister of Finance of Croatia.
What is BitLucky?
BitLucky was founded in Rijeka in 2017 by Luka Burazer. The company traded cryptocurrencies on centralized exchanges, on behalf of its clients. According to their promise to the users, the company invested a maximum of 20% of their stake, and the rest of the funds were safe in “cold” and “hot” wallets. This was to ensure BitLucky and investor stakes were safe and protected from excessive losses.
The way the company was operating, it was doing well until the end of last year. Since then, due to a series of wrong investments, the real trouble began for both BitLucky and its investors. The problems were skillfully hidden from investors, and the company continued to operate until mid-May. On May 20th, news broke that BitLucky had no funds. In addition, the official Discord channel disappeared, as did the founder of BitLucky.
The last message from Luka for the investors came in a form of a short email:
Unfortunately, due to a series of bad trades and decisions, I brought the company into crisis. There will be more information to share in the coming days. We are available by phone.
Along with this message, all his accounts disappeared from social networks. Almost simultaneously, his assistant Eugen Travalj erased all trace from social networks. Kriptovjesti managed to locate Travalj, who said that they had to hide and figure out how to deal with the investors.
The initial estimate was that 70 million euros were embezzled from the company’s 700 investors. However, a group of investors confirmed for Netokracija that it is a significantly smaller amount, which amounts to around 15 million euros. The reason for the huge discrepancy is the volatile prices of crypto currencies. According to the current price, investors are seeing loses that amount to 70 million euros. According to the value of the invested funds, this number is 15 million.
BitLucky is not registered for crypto-investment
The company was founded in 2017 but was never actually registered to offer investment in crypto-assets. The Croatian Financial Services Supervisory Agency (HANFA) reported that because of this it is unlikely that customers will get their money back.
“BitLucky is not registered in the Court Registry for virtual and fiduciary currency exchange activities, nor for the wallet service, therefore BitLucky is not on the HANFA list.”
According to the 2020 census, only 18 companies are licensed to engage in virtual and fiat currency exchanges. BitLucky is not on this list.
All are doing well in the ‘bull’ market
In crypto circles in Croatia, Luka Burazer was considered to be a top analyst that specializes in the crypto exchange. His video analysis were followed by all walks of Croatian crypto-enthusiasts. Today, some of the experts, seeing the latest developments with the project, doubt his reputation…
In order for BitLucky to work, Luka not only had to know the state of the market, he had to be flawless in his estimates. During the entire investment he was allowed no margin of error. This was not a problem during the period when cryptocurrencies were skyrocketing, but the situation changed drastically the moment cryptocurrencies started fluctuating.
Since the very founding of BitLucky, Luka has been accused of creating and encouraging a pyramid scheme. Business angel investor Hrvoje Prpic was one of the first to be suspicious of the company and the business model. When he demanded an explanation as to why the business was not a Ponzi scam, he was told that reports are sent out on a monthly basis. The situation with invested kuna was bad even then, but Ether and Bitcoin had a growth of up to 300-400%. Luka promised that the situation with invested Croatian kunas will follow this trend in the future.
Some investors are surprised how long the company has been operating on a false pretense of success, considering that BitLucky made unrealistic promises about the crypto market.
“It took longer than we anticipated,” says one investor.
Cryptocurrencies are not banned in Croatia but…
Croatia does not prohibit trade and payment with crypto currencies. The state has not regulated this market, although citizens have to pay a tax depending on how they acquired cryptocurrencies. The Croatian governor of the National Bank reminded that they warned in the past that the market is not regulated, so extreme caution is advised.
“We have clearly said, if you go to this market, be prepared that the stake you enter with can be lost,” says Boris Vujic, governor of HNB.
Luka is on the run
Following the ‘disappearance’ of BitLucky’s official Discord channel, investors organized themselves and created their own channel; it was a meeting place for those that were wronged. BitLucky has been reported to Interpol, the Croatian Prosecutor’s Office and the police. The main suspects are Luka Burazer and Eugen Travalj.
So far there are neither news about their whereabouts, nor how investors will be compensated…