Crypto Brahma, a popular crypto trader and head of paid Discord group Moon Club, lost money intended for an ICO after getting liquidated in a margin trade a month ago, it has emerged. An email posted on Twitter shows Brahma admitting to a friend that he margin traded with funds sent to him by his followers that were intended for an ICO, allegedly some 1,700 ETH worth $241,400 at the time, only to get liquidated and lose the lot following Bitcoin’s mega pump last month.
Despite admitting to breaking his followers’ trust, he asks them to have faith that he will refund the lost ETH “probably with interest” over the following months.
Discord Deleted. TG Deleted. Twitter Deleted. Crypto Brahma leverage traded some pool funds for Elrond and got Rekt. #Crypto_Brahma
See you in 5 months he says LOL. pic.twitter.com/E2A0vBo41E
— The CryptoArnie (@The_CryptoArnie) April 30, 2019
Brahma’s Disappearing Act
According to members of the Moon Club, Brahma disappeared from the group shortly after Bitcoin’s $1,000 pump last month, with his absence attributed to a motorcycle accident some days later. Two weeks of silence combined with deletion of various social media accounts led some to smell a rat:
sounds like a paid group exit scam to me… he had one of the scammiest paid groups going.
— Baron Von Carbon (@TheCarbonKid) April 17, 2019
Sure enough, last Friday he admitted via the email that he “got greedy” and “used the [ICO] funds for margin trading at a low leverage”, describing the decision to gamble with his followers’ money as “an opportunity that needs to be tested.” Indeed he did test it, shorting BTC right before its $1,000 mega pump, which he now says triggered a “quite substantial” stop loss. In a contradictory message he promises to return the lost ETH “over the next couple of months”, but then says the timeline for this return of funds will be five months. Given that he seemingly hid behind a motorcycle accident to cover his absence, it seems unlikely that he will retain the confidence of many. Indeed, the responses have been telling:
Make sure to follow me.. *shameless self promotion*
— The CryptoArnie (@The_CryptoArnie) April 30, 2019
“See you in 5 months” .. translates to “Ima get a 5 month headstart so the pitchforks and torches don’t catch me!”
— ? Clark.XRP.Griswold ? (@JenkinsMarley) May 1, 2019
There’s probably still people from his paid group waiting for refunds. Ha!
Sorry for the guys involved in this.
— Pursuit0fSpace (@Pursuit0fSpace) May 1, 2019
Risk Management Reminder
The incident is reminiscent of a case last year that saw prominent crypto trader Jeremy Spence, known on Twitter as Coin_Signals, who was the subject of a class action lawsuit from investors who allege he mishandled ICO funds given in good faith and lost their money. Spence is said to have been managing some 1,500 BTC when in November 2018 he bet on BTC going up, right before it collapsed to $3,500 from $6,500, losing most of his holdings.
In an unregulated space like cryptocurrency, incidents such as this are a stark reminder of the perils of entrusting your money with a third party. It can be tempting to farm your trading out to someone with a good track record, but it’s vital to anticipate some losses and use any outsourcing as part of a diverse risk management approach.
