HitBTC Allegedly Holding User's Funds Hostage Despite Submission of Proof of ID

  • One Redditor claims HitBTC is holding his funds hostage, despite having documents necessary for KYC/AML checks.
  • Users on social media are accusing it of selective scamming.
  • Searching for complaints against the exchange leads to a plethora of results.

HitBTC, a controversial cryptocurrency exchange, is once again under fire as one Redditor claims it’s holdings his funds hostage while demanding he verifies his social media accounts, even after proving information regarding his identity.

According to Reddit user Allomancer_Jak, the cryptocurrency exchange is currently holding his funds hostage, even though he attempted to verify his identity with the exchange by sending a photo of himself and his passport in front of an email from HitBTC’s security team.

When this wasn’t good enough for the exchange, the Redditor added, he included proof of his residency and his bank statement in the documents sent to the cryptocurrency exchange, but to no avail.

In its most recent demands, the exchange is asking the user to log in to the platform without using a virtual private network (VPN) – which may allow it to record where he is logging in from. It further asked him to provide information on the origin of deposited funds. The message HitBTC send the user reads:

For your convenience, the origin of funds report may be presented in a free form as a chain of events in chronological order, every step validated with blockchain explorer data, screenshots, and data used on other crypto infrastructure services, so that we would be able to contact them for verification, if needed.


It added that the user should send over links of his social media accounts, presumably to verify he has an online presence.

In addition, kindly update us with the data regarding your social networks presence, i.e. the links to your profile in major social networks.


These demands came after the user sent over Coinbase transaction records that he purchased his BTC with fiat currency on the platform. Tracing the path of his funds through the blockchain could be extremely hard or nearly impossible.

As various users commenting on the Reddit post noted, anyone could impersonate Allomancer_Jak on social media. Some believe HitBTC, along with other companies associated with it, are selectively scamming, meaning they pick specific targets to scam while operating as legitimate organizations.

Searching for complaints online against the exchange leads to a plethora of results, which implies something is indeed going on. As CryptoGlobe covered, eccentric cybersecurity pioneer John McAfee even launched a campaign against it earlier this year.

McAfee’s campaign, however, was likely motivated by HitBTC’s withdrawals fees on a project the bitcoin bull invested in. The cybersecurity expert accused HitBTC of being liable for the “death of untold people,” over a lack of support for Docademic (MTC), a project that claims to offer users free health care services.

The cryptocurrency exchange recently barred Japanese users from its platforms, as it’s set to launch a licensed subsidiary in the country in Q3 this year.

Could Federal Reserve’s Proposed Real-Time Payment and Settlement Service Help Ripple?

Dilip Rao, Global Head of Infrastructure Innovation at Ripple, seems to believe that the FedNow Service (aka "FedNow"), the U.S. Federal Reserve's proposed real-time payment and settlement system, could help rather than hinder Ripple in achieving its mission of creating the Internet of Value (IoV).

What Is FedNow?

On Monday (August 5), the Federal Reserve (aka "The Fed"), the central bank of the United States, issued a press release to announce that it wanted to develop a 24-hour real-time payment and settlement service, called the FedNow℠ Service, in order to support faster payments within the U.S.

The Fed believes that "faster payment services, which enable the near-instantaneous transfer of funds day and night, weekend and weekdays, have the potential to become widely used and to yield economic benefits for individuals and businesses by providing them with more flexibility to manage their money and make time-sensitive payments."

Since the Federal Reserve was created in 2013, it has provided payment and settlement services to over 10,000 financial institutions in the U.S. The Fed thinks that this reach "will help the FedNow Service support a nationwide infrastructure on which the financial services industry may develop innovative faster payment services for the benefit of all Americans."

Federal Reserve Board Governor Lael Brainard had this to say:

"Everyone deserves the same ability to make and receive payments immediately and securely, and every bank deserves the same opportunity to offer that service to its community. FedNow will permit banks of every size in every community across the country to provide real-time payments to their customers.

The Board of Governors of the Federal Reserve System wants public comment (within three months) on "how the new service might be designed to most effectively support the full set of payment system stakeholders and the functioning of the broader U.S. payment system."

The FedNow service is expected to become available in 2023/2024.

Also, the Fed said that it intends to explore the expansion of Fedwire Funds Service and National Settlement Service hours, up to 24x7x365, to facilitate liquidity management in private-sector real-time gross settlement services for faster payments and to support a wide range of payment activities, beyond those related to faster payments.

The Federal Reserve's Frequently Asked Questions (FAQ) document for the FedNow service points out a few interesting things:

The Federal Reserve’s new FedNow Service, alongside services provided by the private sector, will help establish a safe and efficient nationwide infrastructure supporting faster payment services in the United States.

The FedNow Service will process and settle individual payments within seconds, 24 hours a day, 7 days a week, 365 days a year... The service will support values initially limited to $25,000.

As with current Reserve Bank services, the FedNow Service will be available to banks eligible to hold accounts at the Reserve Banks under applicable federal statutes and Federal Reserve rules, policies, and procedures.

What Ripple Thinks About The FedNow Service

Shortly after the Federal Reserve's announcement about the proposed FedNow Service, Dilip Rao, Ripple's Global Head of Infrastructure Innovation, sent out the following tweet to point out that FedNow could in fact be helpful to Ripple:

Here is how Ripple defined the Internet of Value in a blog post published on 21 June 2017:

Our vision is for value to be exchanged as quickly as information. Although information moves around the world instantly, a single payment from one country to another is slow, expensive and unreliable... With the Internet of Value, a value transaction such as a foreign currency payment, can happen instantly, just as how people have been sharing words, images and videos online for decades. And it’s not just money. The Internet of Value will enable the exchange of any asset that is of value to someone, including stocks, votes, frequent flyer points, securities, intellectual property, music, scientific discoveries, and more.

What the XRP Community Thinks About the FedNow Service

Perhaps, the feelings of the better informed members of the XRP community on Twitter were best expressed by "XRP Research Center" (@XrpCenter), one of the top XRP influencers: