EOS-based wallet app shutdown, $52M in user funds gone?

In what could be considered as a possible exit scam, EOS Ecosystem, a Chinese digital wallet application based on EOS blockchain, has shut down. It reportedly closed off with millions of dollars belonging to the customers.

$52 million lost to EOS-based wallet app

ChainNews, a local blockchain news outlet reported the news on Monday. The creators of the EOS-based wallet app bagged about $52 million of customers funds through the undisclosed shutdown of the platform.

The users had raised concerns that they were no longer able to get the funds on their respective accounts held with the EOS-based wallet app. According to the report, most of the users’ funds were also withdrawn from the app systems.

Fraudulent moves by EOS Ecosystem

This is not the first time the EOS-based wallet app displayed such a shady move. As per the report, the platform claims that it had an EOS blockchain node, which probably is not valid. Also, most of its services are based on a pyramid scheme.

The cryptocurrency wallet reportedly promised investors high profits for any EOS deposited on the platform. EOS is the native digital currency of the EOS blockchain platform, which is meant to support large-sized applications.

Sometime last year, legal action was filed against the EOS Ecosystem in a local Chinese court in Tengzhou. The case was that the platform conducted a pyramid scheme that consisted of about 33 million EOS cryptos, which is currently worth $81 million.

EOS blockchain

Released in 2018, EOS is among the new blockchain projects in the cryptocurrency industry. Part of its objective is to enable a system that can handle millions of transactions in a second. However, it appears fraudsters are taking advantage of the platform for illegal transactions.

Ever since the blockchain platform was released, many individuals and firms have been reportedly conducting fraudulent acts around its crypto, EOS. Per the report, projects like EOSCUBE, including EOS Vote, have been flagged as frauds.