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.

Coinbase Reportedly in Advanced Talks to Acquire Xapo’s Crypto Custody Business

Francisco Memoria

U.S.-based cryptocurrency exchange Coinbase is reportedly in advanced-stage talks to buy cryptocurrency custody provider Xapo, for about $50 million. The deal’s goal would be to boost its custody business and diversify revenue sources

According to a report by crypto news outlet TheBlock, citing sources familiar with the matter, both Coinbase and Fidelity Digital Assets were ‘locked in a neck-and-neck race’ for the crypto custody firm, and Coinbase ended up coming out on top.

Fidelity Digital Assets is Fidelity Investments’ bet to bridge crypto and traditional finance. The firm is reportedly going to start buying and selling the flagship cryptocurrency bitcoin within “a few weeks.” Fidelity Investments is notably one of the largest financial firms in the world, with $7.2 trillion worth of assets under management (AUM).

Coinbase beating Fidelity to the Xapo sale, per the news outlet, shows the cryptocurrency firm is looking to “aggressively diversify its revenue to be less prone to the cyclical nature of cryptocurrency trading.”

Xapo itself has raised a total of $40 million since 2012, and its main product is cold storage vault custody of BTC. According to the report it has $5.5 billion of assets under custody (AUC), which means it has over 700,000 BTC under custody. Bloomberg has in the past reported the company held $10 billion, 7% of BTC’s supply, in its vaults.

The crypto custody firm’s business model revolves around generating revenue enabling over-the-counter (OTC) trades for customers using the bitcoin it has under custody, as it doesn’t charge users to store their funds in its cold storage.

The company has seen firms like the Digital Currency Group, Winklevoss Capital, and Blockchain Capital invest in it, as well as top Silicon Valley VC firms like Greylock Partners and Index Ventures.

If the deal goes through, Xapo will join a number of companies Coinbase has acquired over the last few months. These include Earn and Toshi, which turned to Coinbase Earn and Coinbase Wallet. Earlier this year the firm acquired analytics company Neutrino in a controversial move, as its team was associated with Hacking Team, a group that’s said to have developed software that aided human rights abuses.