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.

HitBTC

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.

HitBTC

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.

Binance Hacker Consolidates Stolen Bitcoin to Seven Addresses

The hacker(s) who performed a large-scale security breach on Binance, the world’s largest crypto exchange in terms of trading volume, have now transferred the 7,070 Bitcoin (BTC) they stole to only seven addresses.

Hackers Also Obtained Users' 2-Factor Authentication Codes And API Tokens

On Tuesday (May 7th, 2019), Binance suffered a damaging hack in which hackers managed to not only steal bitcoin’s valued at over $40 million, but they also reportedly gained access to users’ 2-factor authentication codes and API tokens.

According to a report published by The Block on May 9th, 2019, the stolen Bitcoin was transferred from Binance’s hot wallet on Tuesday via a single transaction - which consisted of 44 outputs. Notably, 21 of these were Segwit, of Bech32, crypto addresses and 99.97% of the funds have been moved to them.

Moreover, the hacker(s) have now consolidated the stolen bitcoins from the 44 crypto addresses to only seven addresses. At present, six of these addresses hold 1,060.6 BTC and one address is holding 707.1 BTC.

The addresses reportedly containing the stolen BTC are as follows:

  1. bc1q3a5hd36jrqeseqa27nm40srkgxy8lk0v0tpjtp (Bech32 address holding 707.1 BTC)
  2. bc1q2rdpyt8ed9pm56u9t0zjf94zrdu6gufa47pf62 (Bech32 address holding 1,060.6 BTC)
  3. bc1qx3628eh9tdnm0uzculu8k6r2ywfkc5zns2hp0k (Bech32 address holding 1,060.6 BTC)
  4. bc1qnf2ja3ffqzc3hskanjse6p8zag52fm6jgmmg9u (Bech32 address holding 1,060.6 BTC)
  5. bc1qw7g5uxxl750t0h2fh9xajwuxp4qt634yh3vg5q (Bech32 address holding 1,060.6 BTC)
  6. 16SMGihY94H8UjRcxwsLnDtxRt7cRLkvoC (P2PKH address holding 1,060.6 BTC)
  7. 1MNwMURYw1LkPnnpda2DQkkUsXXeKL9pmR (P2PKH address holding 1,060.6 BTC)

Before The Block confirmed the list of addresses above (which currently contain the stolen funds), Confirm, a London-based anti-money laundering and counter-terrorism (AML/CTF) firm had revealed via Twitter that it found that 1,227 BTC was initially moved from the Binance hot wallet to two other crypto addresses, one of which contained 520 BTC and the other held 707 BTC.

Binance CEO Considers Chain Reorg After Hack

Following the 7,070 bitcoin hack, Binance CEO Changpeng Zhao (or “CZ”) had initially proposed the idea of performing a chain reorg - which could reverse the set of transactions made by the hacker(s). This, CZ had first said, would help recover the funds and serve as “revenge” against the malicious actors.

However, the crypto entrepreneur decided not to attempt a chain reorg after consulting with various experts in the cryptoasset industry.