HitBTC Freezes Clients’ Funds Before Proof-of-Keys

HitBTC denied all acquisitions made against calling the withdrawal freeze 'standard procedure'.

HitBTC is in the spotlight again as the exchange froze many customers’ withdrawals before the annual proof-of-eyes event, as per dozens of customer complaints on Twitter and Reddit.

One of the first open complaints was posted on Reddit on December 31. The person with the username PEDXS accused the exchange of deliberately suspending his withdrawal request even after all KYC requirements were passed.

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“Six months ago my account got suspended. After months of sending 40 plus emails, HITBTC finally unfroze my account. I immediately withdrew most of my funds but left a small amount to day trade. I did that because HITBTC promised that ‘no further automated restrictions will be applied’. Over the months, from day trading I have built back my balance up to a couple BTC. With the proof of key date approaching, I felt that HITBTC is the prime suspect for being insolvent, so I tried withdrawing my BTC. Guess what, they blocked the withdrawal and froze my account again,” PEDXS wrote on Reddit.

PEDXS is certainly not alone as soon another Redditor going by the username LOOKATMYIQ complained about something similar and bashed the exchange.

“I have been trading crypto for years on all kind of exchanges and never had my funds locked without warning like this. Support was fast to respond when asking for additional (over the top) information but since I have given them everything they have asked for they’ve just disappeared on me,” LOOKATMYIQ noted.

Trace Mayer, renowned Bitcoin investor and the initiator of the proof-of-keys campaign, jumped to the rescue of the affected users and voiced his concerns about HitBTC’s foul play.

John McAfee, a controversial crypto promoter and the former software entrepreneur, also joined Mayer against HitBTC and called the exchange a “corrupt company.”

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Proof-Of-Keys

Proof-of-keys is a campaign launched by Trace Mayer that requests crypto users to withdraw their funds from third-party controlled wallets like exchanges and store them somewhere where the users hold the private key every January 3. The intention behind it is to check the legitimacy of the third-party controlled wallets and test their solvency.

Foul Play?

Though HitBTC did not issue any official document addressing the customers’ grievances, it replied to the complaints on Twitter asking the customers to provide their complaint numbers or just copy-pasting the message “our team is currently working on it – kindly wait.”

Repeat Offender

This is not the first time HitBTC is reluctant to give back customers’ assets as in July 2018, Finance Magnates reported about a similar case.

Earlier, PEDXS also invited other HitBTC users to join him in a class-action lawsuit against the exchange.

HitBTC’s Take

Replying to Finance Magnates, the exchange, however, denied all claims made against it.

According to HitBTC, PEDXS with his account “has passed the procedure successfully and full functionality of his account is already restored.”

It also accused the ‘Proof-of-key flashmob’ of demining the exchange’s reputation.

“Various crypto media outlets have been reporting cases of users who tried to withdraw funds from our exchange and received the message ‘Withdrawals are temporarily disabled on your account’. It’s true: sometimes, when our security measures are triggered, withdrawals can be frozen momentarily. This happens for safety reasons only – it is standard procedure, and we do it simply because the security of our customers is our top priority,” HiTBTC noted.

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