Following Estavi’s May 2021 arrest in Iran on charges of “disrupting the economic system,” his CryptoLand exchange folded, leaving customers unable to access their funds, and the price of his Bridge Oracle project’s BRG token tanked. Now out of prison, the Iran-born crypto entrepreneur says he’s trying to make it right with holders of those almost worthless tokens, which were issued on the Tron blockchain.
Last week, Estavi offered to let holders swap those tokens for a new version of BSG running on the Binance Smart Chain. Unlike its namesake token, the new BRG can be sold on several exchanges.
The catch? He wants the original BRG investors to send him their phone numbers and some TRX tokens (the native currency of the Tron network) to verify their holdings. He’ll send them their new tokens within a month or two along with the TRX tokens that were sent for verification, he claims.
“I want the crypto community around the world to support me and for us all to support each other, so that we can continue to be powerful and go further and help the blockchain,” Estavi said in Persian, in one of several interviews with CoinDesk.
Many Bridge Oracle investors said they have their doubts, for numerous reasons. For one thing, Estavi launched and promoted the new token before working out how to repay investors in the old one.
“This gentleman did not swap a single bridge and started to [list new BRG] in new exchanges,” a Bridge Oracle token (BRG) holder who goes by “Mohamad,” told CoinDesk via the Telegram messaging app, referring to Estavi.
Another reason investors are wary is that, according to them, Estavi did not provide definitive details about the potential swap until after being bombarded with questions about it. The swap was officially announced following last week’s announcement that he had put the Dorsey NFT up for sale.
CoinDesk spoke to at least 10 BRG investors who are waiting to receive new tokens.
“It was more like a promotional show,” said a user who goes by “Farhad,” speaking in Persian of Estavi’s offer. “It seems that there is no swap.”
A community of BRG holders have banded together in a Telegram group to follow updates on the token and make sure they get their money back. (Few if any are native English speakers.)
Estavi “did not swap our tokens (25,000 holders) on the Tron platform, please support holders, he is misusing [the] crypto environment to get rich,” another BRG holder, who goes by “Taha,” told CoinDesk via a Twitter direct message. Taha said he owns 500,000 old BRG tokens stored at two exchanges.
Estavi told CoinDesk he only asked users for small amounts of TRX, never more than 0.1% of the total number of BRG tokens in a given wallet, to verify their holdings to initiate the swap. An investor who held 290,417 BRG, for example, sent 147 TRX (about $8.70) for the verification. Anyone looking at the Tron blockchain would be able to confirm that the wallet that sent 147 TRX also held 290,417 BRG.
After users started complaining that even 0.1% was too much to ask, Estavi said on April 11 that he’d set a new ceiling in absolute terms: Now users would be asked to send no more than 30 TRX (about $1.80) to verify their BRG holdings. A BRG investor confirmed to CoinDesk that 30 TRX is the new ceiling, and recent transfers to the designated Tron wallet for the swap fall under this threshold.
In a token swap, two parties agree to trade one token for another. One of the parties will give an agreed amount of one asset to the counterparty, and in turn receive a certain amount of the other. Normally, when blockchain projects migrate from one chain to another, swap requests can take up to a few days to process. The period for swapping tokens can vary depending on the rules set by the project involved, and there are some safeguards in place to prevent someone from taking off with users’ funds.
In this case, Estavi says the swap is to be conducted “manually,” by which he means users will receive their new tokens in a month or two.
CoinDesk reviewed incoming Tron transfers to the address listed by Estavi and the amounts match the ranges Estavi mentioned.
But the request for TRX tokens to verify holdings of BRG on the Tron network, and the fact that Estavi’s team initially planned to ask users to share their private keys as a method of verifying their holdings, has spooked some investors.
They just want their money back, in some form.
“Consider that we don’t want to ruin the project, we want to get our rights,” said another BRG investor, “Hawk.”
In an interview with CoinDesk, Estavi described his arrest and the trauma of the month he spent in solitary confinement. Estavi insists he has been a “victim of cryptocurrency” but that he’s back and “more powerful” than before.
He also said that he is determined to return funds to his investors. But his splashy return has only enraged some of his original investors and crypto watchdogs.
After Estavi was arrested last year and his assets were seized by Iranian authorities, BRG plummeted, leaving holders with nothing. Customers of his exchange fared no better. In July 2021, CryptoLand investors in Iran reportedly took to the streets to protest the loss of their funds. It is unclear how much money in total was kept on the exchange before it closed.
But after nine months in custody, Estavi was released without explanation, the charges against him seemingly dropped. Since then he has regained access to his social media accounts, and has secured verification badges for his personal Twitter account (which was verified prior to his arrest) and for the account for Bridge Oracle. These badges, also known as blue checks, signal to Twitter users that a well-known user’s account has been verified. They are hard to come by.
Estavi also launched the new BRG token, this time on Binance Smart Chain (whose native token is BNB), to the dismay of original BRG buyers who are still waiting to recoup some of their losses.
In March 2021, Estavi purchased the NFT of Dorsey’s tweet for $2.9 million and was suddenly all over the news. He was even interviewed for an article by BBC in which he compared Dorsey’s NFT to Leonardo Da Vinci’s “Mona Lisa.” The NFT was akin to an autographed baseball card or record album; while the tweet was in the public domain, the tokenized version was unique.
On May 17, 2021, according to Estavi, armed officials broke the door to his apartment in Tehran. He was later blindfolded and taken to a prison, Estavi said.
After his arrest, Estavi’s Twitter account was seemingly seized by officials. A tweet stated that “The owner of this media outlet was arrested on charges of disrupting the economic system, by order of the Special Court for Economic Crimes.”
According to data from CoinMarketCap, following the news of Estavi’s arrest the market capitalization of the Tron version of BRG fell from around $1 billion (on May 16) to $38.9 million seven days later and retraced only a fraction of the losses in December after he revealed he was out of prison.
Estavi claims he was at Ward 2A in Tehran’s Evin prison, known as one of the most notorious jails in Iran. He says no physical harm came to him, but he was questioned daily until late into the night, and did not have a lawyer assigned to him.
Teary-eyed during a Zoom call with CoinDesk, Estavi said the experience was emotionally taxing. He recalled the month he spent in a two-by-three meter room in solitary confinement, only being allowed to walk around blindfolded.
“I never want to think about those memories,” Estavi said later in a WhatsApp message.
After six months, Estavi was moved to a public ward in November (which is when he began working on restarting his projects, as his activity on official Telegram accounts for CryptoLand shows). He stayed there for three months, after which he claims he was released and off the hook.
“I could not be charged and I did not commit any crime. Does anyone stay in prison when no one has committed a crime !?” Estavi said on WhatsApp.
CoinDesk was unable to independently verify Estavi’s account of the arrest and time spent in prison. The Islamic Revolutionary Guard Corps’ (IRGC) Cyber Defense Command did not respond to a request for comment. Its website is no longer working. An in-depth, archived article that originally appeared on the website hints at why the IRGC, a branch of the Iranian Armed Forces, was suspicious of Bridge Oracle. The article refers to Bridge Oracle, in Persian, as “one of the dubious projects that has suffered a lot in various levels of implementation and design” and says the project used “immoral” methods to attract users to various Telegram groups.
The U.S. government has designated the IRGC a foreign terrorist organization and claims the Iranian agency was behind a 2020 “coordinated campaign of identity theft and hacking … in order to steal critical information related to U.S. aerospace and satellite technology and resources.”
Estavi’s sudden release has raised eyebrows in some crypto circles.
Mohammad Jorjandi, owner of Webamooz, an independent cybercrime investigator based in Virginia who has been following Estavi’s case for a year, is among members of the Iranian crypto community who have questioned Estavi’s return, including in the Webamooz Telegram channel that has around 450,000 members. Webamooz frequently discusses individuals in the Iranian fintech space who are suspected of shady practices.
Jorjandi, who says he lost access to his own Twitter account for sharing personal information of suspected crypto scammers, shared in the Webamooz chat and to CoinDesk a post that suggested Estavi may have asked a Tehran court to set him free to raise money through the sale of BRG tokens to refund Cryptoland users. Jorjandi did not provide proof that the court allowed Estavi to go free to raise funds.
“I'm not in any side but when he [does] not gives CryptoLand users money back (because he doesn't have or doesn't want to show) but start to sell BRG again it's clear that [the court] let him to bring money from ANYWHERE even [a scam],” Jorjandi said in a written statement.
Jorjandi shared an unverified document, which he said first appeared in a Telegram group of people who lost money in CryptoLand, on the Webamooz Telegram channel. Jorjandi said the document appears to be a letter to a prosecutor and it suggested Estavi sought permission from a local court to list BRG tokens “only on foreign exchanges.” Estavi disputed the document’s authenticity, calling it “a simple paper” that had nothing to do with him.
“You call this a document?” Estavi said in a WhatsApp message, referring to the paper, adding, “I do not accept such a thing.”
Jorjandi also said that Estavi had been an outspoken supporter of former Iranian President Mahmoud Ahmadinejad on his social media channels, which Jorjandi said may have made him an IRGC political target under the moderate government in power at the time of the arrest. Ahmadinejad was a hardline conservative who was known for fiercely defending Iran’s nuclear program as president from 2006 to 2013. Separately, Estavi told CoinDesk that he believes one of the reasons he was arrested may have been because of his popularity on social media and for showing support for Ahmadinejad. Estavi also insisted he is not a “political person.”
Estavi would not discuss the conditions of his release with CoinDesk. But he said he was working on getting his investors their money back on his own volition.
“It is important to me that people get their property and I try to do that,” Estavi said.
When asked why he wouldn’t use the proceeds from the NFT sale, which he had expected to total tens of millions, to repay BRG investors, Estavi said: “I repeat this: We are preparing and creating a technical infrastructure for swap tokens. The tokens will be swapped soon.” (The question turned out to be academic, with the highest bid for the NFT only three figures and Estavi now saying he may never sell the asset.)
The much-awaited token swap
On Nov. 13, 2021, Estavi posted the first messages on the CryptoLand Telegram group since his arrest in May 2021. In one voice message, reviewed by CoinDesk, Estavi tells BRG holders to keep their tokens where they are, and that holders will not bear any losses. Hawk took this to mean Estavi will return users their tokens without condition.
But in a later message (originally in Persian), reviewed by CoinDesk, he announced a special airdrop, or giveaway, “in proportion to their BRG assets” but “only for holders and friends who have purchased” the original BRG after the date of his arrest.
Separately, during an Instagram Live session on Feb. 24, 2022, reviewed by CoinDesk, Estavi set the opposite condition for swaps:
On March 14, 2022, Estavi announced his return to the crypto world in a Twitter post accompanied by a video. That day, the Bridge Oracle Twitter account announced that the BRG token, originally of the Tron network, would be relaunched on the Binance Smart Chain; $5,000 worth of new BRG tokens would be given away to 100 lucky winners, the post said.
Meanwhile, holders of the original BRG tokens were starting to worry because there was no clear update on whether or how they would be able to swap their old tokens for new ones.
On March 23, 2022, Estavi posted a message on the Bridge Oracle Twitter page with an update on the swap that brought unwelcome news to BRG holders: “I hope you understand that we can not run the previous contract again because of the problems in the past, and we have to do the swap process manually, and this process can be time consuming.”
The post did not specify what the problems were.
Finally, on April 7, 2022, the same day as Estavi’s big announcement about the NFT sale, Bridge Oracle announced on Twitter that the swap was finally happening.
A number of users quickly called attention to potential irregularities in the swap process.
According to Estavi’s post, the Bridge Oracle team has set up a “bot” to add wallets to a swap list, after which the swap is conducted entirely manually. To qualify for the swap, users must first enter a valid phone number. If the bot approves the number, the wallet address that contains the BRG tokens can then be submitted.
If the wallet is successfully added, the bot asks the user to send varying amounts of tron tokens (TRX) to the following address: TZ2DmsPixv8nLEbnxd2hrJ5pFFxF4J7dt6. The requested TRX is to confirm a user has control of the wallet they have added.
According to BRG holders who have been trying to successfully initiate the swap, the amount of TRX they have to send to the address is proportional to the number of BRG held in their wallets.
But unverified screenshots of “swap bot” exchanges circulating via social media among skeptical BRG investors show, for instance, 20,367,369 TRX (worth around $1.2 million U.S.) being requested to “confirm” a wallet containing 3 million BRG, rather than the 3 million TRX ($179,000) one would expect under Estavi’s initial 0.1% formula.
The screenshots that are floating around have alarmed users like Taha, although he has an entirely different problem. He has some 500,000 BRG sitting in two crypto exchanges that he cannot move. Estavi says his team is negotiating with exchanges to get tokens released but did not detail any solutions.
According to data on blockchain browser TronScan, the wallet has already collected just under around 48,000 TRX tokens (around US$2,900). The wallet has only been active for just over a week and a majority of incoming transfers to the wallet occurred after the swap announcement on Twitter. Estavi said the wallet is only being used for managing the token swap.
One investor scoffed at the slow and cumbersome process for the “manual” swap, which falls short of Bridge Oracle’s rhetoric of innovation (its tagline is “Let’s Bridge the Worlds”).
“The method of swapping BRG introduced by [Estavi isn’t] relevant to blockchain!” this investor wrote in a Telegram chat, adding sarcastically: “It’s a new concept!”
When asked if any of them had received any new tokens yet, as part of the swap, one investor, “Shapoor,” replied to the group with: “noooooooooooooooooooo”
Desperate for answers, the BRG investors in the Telegram group with Taha and Hawk also reached out to the exchanges that listed the BRG tokens. One exchange they wrote to was CoinEx which had previously listed the original BRG token on Tron.
“We are sincerely sorry for the inconvenience,” the reply from CoinEx read, adding, “As we have indicated very clearly that due to the inability of the BRG project team offering on-chain transfer of BRG token, the transaction of BRG has been terminated not only on CoinEx but also the whole blockchain.”
CoinEx told CoinDesk via an email that because the original BRG token on Tron was suspended by the BRG project team, there was no way to “deposit/withdraw BRG to/from somewhere.” CoinEx also said it will be paying “close attention to the project.”
Investors also wrote to BKEX, a relatively small crypto exchange registered in the British Virgin Islands, which was flagged by Forbes in 2019 for replicating and publishing Binance’s trading history as its own. BKEX recently listed the new BRG token launched on the Binance Smart Chain. BKEX’s customer service responded to a user saying customers will have to “go to the project party to communicate and deal with it” and that it can’t help with the problem.
BKEX did not respond to a request for comment by press time. In a blog post, BKEX disputed the Forbes article. While thanking Forbes for the coverage, BKEX said that “its understanding of the principles of cryptocurrency trading is still relatively shallow, and it fails to understand the cross-platform arbitrage behavior of institutional traders.”
When asked why he decided to re-launch the BRG token on the Binance Smart Chain, instead of keeping the original on the Tron network, Estavi said it’s because “BNB blockchain is more powerful and more suitable for our work schedule. We started a large project on Oracle and needed a powerful blockchain.”
He said his target market is never Iran and that he works with international standards. On April 8, Estavi announced yet another BRG giveaway on Twitter. Estavi told CoinDesk the new BRG token would be listed on 11 more exchanges in the coming days.
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