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.

$10 Billion Digital Asset Custodian Xapo Rebrands, Launches New App

Xapo, a Palo Alto, California-based financial services firm that provides “deep cold storage vault” solutions for Bitcoin (BTC) and other cryptocurrencies, has revealed that since 2014, it has been “safeguarding the funds” of over 1.5 million of its clients.

Xapo’s latest blog post notes that it has helped many of its customers launch their own crypto business, purchase their first automobile, “make their first investment,” and conduct cross-border payments.

As noted in Xapo’s recent blog, published on April 8th, 2019, the company has redesigned its official logo and it has rebranded itself. Xapo’s new look “reflects [its] evolution into a global, Bitcoin-powered, financial solution,” the firm’s blog states.

In order to make its products more accessible to consumers worldwide, the American technology firm believes it must offer “more flexible and intuitive” software solutions to its clients.

To better meet the requirements of its clients, Xapo has “developed a revamped app” which has been redesigned to “make it easier to send, receive and store” funds. Xapo’s new app is available for Android, iOS, and web-based interfaces.

$40 Million In Total Funding Received 

Established in 2012, Xapo Inc. has so far received $40 million in total funding and its founders, which include prominent Argentine businessman Wences Casares, believe Bitcoin’s “ultimate success will be based on trust.” The company’s Crunchbase profile mentions that it’s important to consider “whether individuals trust the digital currency’s stability and whether they trust the industry’s security.”

Xapo currently offers “two distinct products” including “an easy access wallet and a locked-down vault.” Both products have been designed to provide “convenience [to] Bitcoin users” which allows them to more easily and securely transact in cryptocurrencies.

Managing $10 Billion In Crypto On Behalf Of Clients

In May 2018, a report had revealed that Xapo’s cold storage vaults were holding around 7% of Bitcoin’s total supply. These funds are being held on behalf of the financial service provider’s clients and were estimated to be worth around $10 billion (at that time).

Xapo’s business operations are overseen by the self-regulating Financial Services Standards Association, which ensures its members follow appropriate regulatory guidelines. These include know-your-customer (KYC) and anti-money laundering (AML) requirements.

Last year, Ryan Radloff, the CEO at CoinShares, a crypto treasury management firm which has more than $500 million in Bitcoin stored at Xapo, remarked:

Everyone who isn’t keeping keys themselves is keeping them with Xapo. You couldn’t pay me to keep it with a bank.