Genbit faced a lawsuit for non-payment. Now, the company must pay significant compensation to the affected party.
A court in Sao Paulo, Brazil, sentenced the cryptocurrency exchange house Genbit for not paying a client. In response to that action, the Brazilian court authorized a blockade of the money stored on the company’s financial accounts, local media reported.
The court decided to seize and block more than 83,000 Brazilian reals (approximately USD 16,400) on Gensa Serviços Digitas S/A accounts. This is the organization in charge of managing the exchange services company.
According to some previous reports, authorities in Brazil imposed a ban on Genbit so the exchange house could not conduct cryptocurrency operations in the country. The Brazilian Securities and Exchange Commission (CVM) considered that the company’s shares were out of the regulations. The CVM also supposed that Genbit already registered some irregularities on the market it handles.
Genbit is also known as Zero10Club. It is part of the well-known Tree Part group, which manages a considerable set of companies that raised numerous suspicions in the regulatory entities of Brazil.
The Reason of the Problem
A former investor paid about 100,000 Brazilian reals (equivalent to USD 20,000) to the company. However, he only received 19,000 reals (USD 3,700) for his investment and decided to file suit against the crypto exchange house.
Now, Genbit must pay to the plaintiff the rest of the money he invested and could face fines for customer damages. The company currently has similar lawsuits in the Brazilian courts for similar cases.
After this situation, the company has received strong criticism and many negative ratings regarding the way it works. Among the worst opinions, some users accused the company of using a “financial pyramid” scheme to defraud large numbers of people through others.
Genbit faces a large number of lawsuits after some customers branded the company as fraudulent. The delays in many payments for cryptocurrency exchanges caused many losses to the company that could receive more accusations against it.
On the other hand, representatives of Genbit have not issued any statement to their clients or to the local press to explain the situation. This is something that has generated more suspicion among the people who use these platforms to buy and sell cryptocurrencies in the market.
This is not the only company operating in Brazil that has faced serious problems with the authorities and with clients through the same “financial pyramid” method. Many “cryptocurrency-based” companies use this same scheme in the South American territory. For this reason, fewer and fewer users decide to invest.
The 18K company Ronaldinho is a similar case. It uses the same pyramid scheme but using the image of the famous soccer player Ronaldinho Gaucho. Another case names the company Atlas Quantum, which also faces some lawsuits for allegedly using a financial pyramid method.
Until the moment these fake companies have affected more than 26,000 customers in Latin America. Brazil is working on preventing these types of crimes and how to compensate affected users.
By María Rodríguez